Efforts to bring to justice the US soldiers who shot dead ITN journalist Terry Lloyd during the early stages of the invasion of Iraq have foundered for lack of evidence, the Crown Prosecution Service admitted today.

It has proved impossible to say exactly who fired the fatal shot which killed the reporter in Iraq in March 2003, said Sue Hemming, the head of the CPS's counter-terrorism division.

An inquest recorded a verdict of unlawful killing in October 2006, and Ms Hemming said forensic evidence indicated Lloyd was injured by shots first from Iraqi forces and then by American bullets.

Mr Lloyd was in a four-man ITN team which also included French cameraman Fred Nerac, Belgian cameraman Daniel Demoustier and interpreter-driver Hussein Osman.

Mr Osman was also killed, and Mr Nerac is missing, presumed dead. Only Mr Demoustier survived the incident, which happened as the journalists were travelling in two cars heading towards Basra because they had heard reports - which later proved unfounded - that an Iraqi armoured brigade had surrended.

Ms Hemming said: “The forensic evidence suggests that the injury which caused (Mr Lloyd's) death was fired from a US weapon.

“This was a particularly precarious situation and Mr Lloyd was not wearing the helmet or bullet-proof vest which had been supplied to him.

“As the two cars crossed the bridge, Iraqi soldiers drove towards them and opened fire. The cars did a U-turn to head back towards the American forces, pursued by the Iraqis.

“The Americans believed that all the approaching vehicles were hostile and opened fire. Mr Lloyd was injured and, although lying in the central reservation, was picked up by a Mitsubishi which was helping wounded Iraqi soldiers to leave the scene.

“Shots were fired at the Mitsubishi, which the driver said came from the American position. When the Mitsubishi arrived at the hospital, the driver went to help Mr Lloyd from the back of the car and found he had been fatally injured.”

Ms Hemming said that the news would come as a bitter blow to Mr Lloyd's family, but assured them that everything possible had been done.

“There is insufficient evidence at the current time to establish to the criminal standard the identity of the person who fired the bullet that killed Mr Lloyd," she said.

“There is also insufficient evidence in relation to the chain of command to establish if there was any person responsible for the chain of events that led to the death of Mr Lloyd.

“I understand that this will be very upsetting news for the family and friends of Mr Lloyd but I can reassure them that every care was taken in pursuing lines of inquiry and reviewing the evidence.”

If the CPS had decided there was available evidence, it could have considered bringing a prosecution under the Geneva Convention.

An ITN spokeswoman said the company was disappointed with the CPS decision.

“Coroner Andrew Walker concluded just under two years ago that Terry Lloyd was unlawfully killed by American troops and ITN has done everything it could to try and ensure Terry’s killer is brought to justice,” she said.

“We are disappointed that the CPS has decided they cannot take this matter further, and that despite the coroner’s call on the Attorney General and the Director of Public Prosecutions to demand that the Americans bring the perpetrator of a possible war crime before a British court of law, the US authorities remain unco-operative.”

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