Lawyers have accused British soldiers of torturing and then executing up to 20 Iraqi prisoners. The damaging allegations feature in a BBC Panorama documentary on Monday.
Army chiefs have fiercely denied the claims by solicitors acting for five Iraqi men who are suing the Ministry of Defence for alleged brutality in the wake of a fierce gun battle.
Statements from the group released by the lawyers claim they heard Iraqi civilian prisoners being tortured then shot or strangled.
Human rights lawyer Phil Shiner likened the alleged killings to Japanese atrocities during the Second World War.
He and fellow solicitor Martyn Day urged the Attorney General to hand the case over to Scotland Yard for investigation because the Royal Military Police were 'not fit for purpose'.
They also demanded a full public inquiry.
British soldiers who were present-during and after the battle in May 2004 say they are 'sickened' by the accusations. Senior commanders say the Army's reputation is being dragged through the mud based on unfounded claims.
The MoD pointed out a 10 month inquiry by the RMP in 2004-5 found no evidence supporting earlier claims of mistreatment of prisoners and the mutilation of corpses. It said it could not comment further as the latest allegations of murder must now be investigated.
The lawyers themselves conceded-that their clients claimed only to have heard - and not seen - the alleged killings, which they acknowledged may not have happened at all.
The case centres on the events of May 14, 2004, which became known as the Battle of Danny Boy - the name of an Army checkpoint. Soldiers were ambushed by scores of locals and insurgents firing machineguns and rocket-propelled grenades.
Troops from the Princess of Wales's Royal Regiment and the Argyll and Sutherland Highlanders fired every weapon they had, and at one point even fixed bayonets to charge enemy positions. A dozen UK soldiers were later decorated for valour.
The Army claims that when its troops finally withdrew they removed 20 enemy corpses along with nine prisoners, and took them to their nearby base, Camp Abu Naji.
By the MoD's account the 20 bodies were logged in and examined by a doctor. Many had suffered appalling injuries in the fighting, but there was no mistreatment after death. They were returned to the Iraqi authorities next day for burial. The nine captured prisoners were questioned and also handed over to the Iraqis. Six were later charged.
Shiner and Day held a press conference yesterday to publish statements by five of the detainees whom they interviewed in Istanbul last month.
All five claim they were violently abused and that they heard what they believe was the torture and killing of an unknown number of other prisoners.
One man claims he heard shots fired, while others described screams due to torture, and 'some sort of strangulation or throat cutting'.
Shiner, who is funded by legal aid, said the statements described 'merciless and unbelievably brutal and cruel' treatment by soldiers.
He suggested two victims had their eyes gouged out before being killed, while another had his genitals mutilated. Day accepted that if the claims were true then large numbers of soldiers and officers, including doctors, must be part of a conspiracy of silence.
When questioned about the credibility of the statements, the lawyers acknowledged the lack of any eyewitness accounts, and admitted they could not be sure the claims were true.
Shiner said: "We are not saying we know what happened. We're saying on balance we believe our clients are telling the truth. It may be that none of this happened. We need an inquiry to establish the truth."
Asked why their clients had not told the RMP about the claims during the first investigation, they suggested the men feared reprisals from British forces.
Day is seeking compensation from the MoD for the five men, on a no-win no-fee basis.
The BBC said the claims in their documentary had been "critically examined".