A secret deal between Britain and the notorious al-Mahdi militia prevented British Forces from coming to the aid of their US and Iraqi allies for nearly a week during the battle for Basra this year, The Times has learnt.

Four thousand British troops – including elements of the SAS and an entire mechanised brigade – watched from the sidelines for six days because of an “accommodation” with the Iranian-backed group, according to American and Iraqi officers who took part in the assault.

US Marines and soldiers had to be rushed in to fill the void, fighting bitter street battles and facing mortar fire, rockets and roadside bombs with their Iraqi counterparts.

Hundreds of militiamen were killed or arrested in the fighting. About 60 Iraqis were killed or injured. One US Marine died and sevenwere wounded.

US advisers who accompanied the Iraqi forces into the fight were shocked to learn of the accommodation made last summer by British Intelligence and elements of al-Mahdi Army, the militia loyal to Moqtada al-Sadr, the radical Shia Muslim cleric.

The deal, which aimed to encourage the Shia movement back into the political process and marginalise extremist factions, has dealt a huge blow to Britain’s reputation in Iraq.

Under its terms, no British soldier could enter Basra without the permission of Des Browne, the Defence Secretary. By the time he gave his approval, most of the fighting was over and the damage to Britain’s reputation had already been done.

Senior British defence sources told The Times that Nouri al-Maliki, the Iraqi Prime Minister, who ordered the assault, and high-ranking US military officers had become disillusioned with the British as a result of their failure to act. Another confirmed that the deal, negotiated by British Intelligence, had been a costly mistake.

The Ministry of Defence has never confirmed that there was a deal with al-Mahdi Army, but one official denied that the delay in sending in troops was because of the arrangement agreed with the Shia militia.

A spokesman for the MoD said that the reason why troops were not sent immediately into Basra was because there was “no structure in place” in the city for units to go back in to start mentoring the Iraqi troops.

Colonel Imad, who heads the 2nd Battalion, 1st Brigade, 1st Iraqi Army Division, the most experienced division, commanded one of the quick-reaction battalions summoned to assist British-trained local forces, who faltered from the outset because of inexperience and lack of support.

He said: “Without the support of the Americans we would not have accomplished the mission because the British Forces had done nothing there.

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