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The aircraft was on a 30-mile journey from the capital to the American logistics base at Camp Anaconda in Balad, 40 miles northwest of Baghdad, when it came down.
Last night search-and-rescue teams had secured the site, but had given up hope of finding survivors. The Ministry of Defence in Britain began the task of contacting next of kin.
If the death toll is confirmed as nine or more, the tragedy will be the biggest single loss of life since since March 21, 2003, when eight British troops died when the United States heli- copter in which they were travelling crashed.
A military source said that the figure was “around ten”, with it “highly unlikely” to be more than fifteen.
The Ministry of Defence would not comment on whether SAS troops were among the passengers. There was also uncertainty last night about what had caused the crash on the day that Iraq went to the polls.
Tony Blair paid tribute to the sacrifice paid by Britain’s Armed Forces by helping to bring democracy to Iraq and said that his thoughts were with the relatives of the dead.
“This is the true face of the British Army: brave, committed, professional the world over, doing an extraordinary job on behalf of their country,” he said.
“Yet again today we see the sacrifice that they make. Our thoughts and prayers are with the families of those who lost their lives today.
“They can be so proud of what their loved ones accomplished. This country and the wider world will never forget them,” he said.
The aircraft, from RAF Lyneham in Wiltshire, crashed at 4.40pm local time (1.40pm). At RAF Lyneham last night, Wing Commander Nigel Arnold refused to comment on the cause of the crash and said that details of the crew would not be released until the next of kin had been informed.
He said: “It would also be wrong of us at this stage to speculate on the cause of the crash, but we can assure you that a thorough investigation will take place.”
The Hercules is capable of transporting troops, fuel, ammunition and humanitarian relief. It can carry up to 128 troops and has a payload of 20 tonnes. It has primarily been employed in ferrying troops from the British headquarters in Basra to Baghdad.
The C130 has one of the most impressive safety records of any military aircraft and is the favoured aircraft of the SAS. It is regarded as being especially useful in Iraq for its ability to land in the desert.
The last serious crash involving an RAF Hercules was in 1994, when a C130 crashed into a hillside in northeast Scotland after stalling at low altitude. All nine on board were killed.
This month, an American captain gave warning that Hercules aircraft flying into the airport at Balad were an inviting target for insurgents. Captain Kurt Kresmer told CBS, the US news network, that militants were “trying to get up small arms fire to hit us”.
Referring specifically to the Hercules aircraft flying into Balad airport, he said: “They’re obviously watching us fly in and out. Their tactics have changed . . . Every member of the crew who can afford to take his eyes off the instruments keeps a lookout for ground fire.”
Balad is a key target for Iraqi insurgents. It is home to one of the largest US airbases in Iraq and has two runways, both more than 11,000ft in length. The airfield is spread over 25 square kilometres.
Last night, Paul Keetch, a spokesman for the Liberal Democrats, said that the disaster was “a tragic but inevitable consequence” of Britain’s involvement in Iraq.
“It is doubly sad that their loss occurs on the same day as Iraq has gone to the polls,” he said. “We can only wish that their sacrifice can help build a democratic Iraq.”
The MoD last night released a telephone number for all concerned relatives to call: 08457 800 900.
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