The head of a private security firm accused of employing rogue “trigger-happy mercenaries” responsible for a series of civilian deaths in Iraq yesterday came out fighting when confronted by his US congressional critics.

Erik Prince, a former Navy Seal and founder of Blackwater USA, vigorously defended the skill and dedication of his operatives — some of whom have died in Iraq protecting the lives of American diplomats.

In testimony to the House of Representatives Oversight Committee he disputed a congressional report on Monday that suggested that his guards are indifferent to Iraqi casualties and regularly open fire first from moving vehicles, without stopping to count the dead or treat the wounded.

This week the FBI opened an inquiry into a September 16 incident involving Blackwater personnel that left at least 11 Iraqis dead. But Mr Prince insisted yesterday that his operatives were returning fire.

In a prepared statement he said: “Congress should not accept these allegations as truth until it has the facts.

“To the extent there was loss of innocent life, let me be clear that I consider that tragic . . . \ based on everything we know, the Blackwater team acted appropriately while operating in a very complex war zone.”

Blackwater has grown out of almost nothing since the 9/11 attacks six years ago to win contracts worth more than $1 billion (£500 million) from the US Government. Mr Prince has donated $160,000 to Republican Party causes.

Its 1,000 employees in Iraq are part of a “shadow army” where an estimated 180,000 private contractors outnumber the 160,000 US troops stationed in the country.

This has been described as the greatest use of mercenaries since the Renaissance princes waged war in Europe.

Henry Waxman, the Democratic chairman of the Oversight Committee, believes that Blackwater’s activities — part of what he regards as a trend for outsourcing government operations at home and abroad — are undermining the “hearts and minds” mission of American troops. “Is Blackwater, a private military contractor, helping or hurting our efforts in Iraq?” he asked.

“Privatising is working exceptionally well for Blackwater,” he added, but that did not mean the American taxpayer and the military were getting an equally good deal.

Foreign contractors, including many former members of the American, British, South African and Australian military, are exempt from prosecution in Iraq and the US military code of conduct. But, according to this week’s congressional report, even when Iraqi civilians had been killed, the US State Department merely asked Blackwater to pay off the families and “put the matter behind us” rather than to insist upon accountability. In one case detailed in the report, a drunken Blackwater contractor shot and killed a 32-year-old security guard for Iraqi Vice-President Adel Abdel-Mahdi during a confrontation in December. Blackwater fired him and arranged for him to be flown out of Iraq the next day.

Among 195 other shooting incidents involving Blackwater employees since early 2005, a guard in Mosul opened fire on a suspect car, killing an Iraqi civilian who was standing nearby.

The convoy moved on and the man was left for dead in the middle of the road. Other episodes have seen Blackwater convoys travelling in Bahgdad smashing indiscriminately into Iraqi civilian vehicles as they drive around the city.

Peter Singer, of the Brookings Institution and the author of Corporate Warriors, says that private security outfits are crossing the line in performing tasks — such as guarding the US Embassy in Baghdad or manning the armoured convoys escorting diplomats — which should be done by the military.

“You need to pull lessons from military doctrine and corporate common sense to limit how much you contract for,” he said.

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