THE policy of prosecuting British soldiers for misconduct in Iraq was in doubt last night after three Guardsmen were cleared of killing an Iraqi looter.

The men, who had been accused of ordering the 15-year-old at gunpoint into a tidal canal where he drowned, walked free after a five-week court martial costing ?2.5 million. 
 
A board of seven officers deliberated for just five hours yesterday before reaching the unanimous verdict that cleared the men of the elite Irish Guards and the Coldstream Guards.

The officers refused to accept the evidence of another looter who was the only witness to the drowning of Ahmed Jabar Karheem on May 8, 2003 in six feet of water in the Shatt al-Basra canal.

The acquittals call into question the future of Britain?s court martial system for dealing with serviceman accused of committing abuses while on duty.

Lord Goldsmith, QC, the Attorney General, will call today for a full debriefing from the prosecuting counsel to identify if any lessons need to be learnt for the three further alleged abuse cases still pending.

The acquittals at the Colchester court martial followed the collapse of the trial last November of seven paratroopers accused of murdering an Iraqi civilian. That case cost about ?5 million.

The judge then delivered withering criticism of the military investigation and the unreliability of the witnesses who were brought over at taxpayers? expense to give evidence.

In the latest case, Guardsman Joseph McCleary, 24, and Guardsman Martin McGing, 22, both of the Irish Guards, and Colour Sergeant Carle Selman, 39, of the Coldstream Guards, were all acquitted of manslaughter.

A fourth soldier, Lance Corporal James Cooke, 22, was acquitted of manslaughter last month after directions from Judge Advocate General Michael Hunter, after two days of legal argument.

Government legal sources said that the Attorney-General would want to know whether the acquittals had any potential implications for other cases.

The most controversial pending case, involving five members of The Queen?s Lancashire Regiment and two from the Intelligence Corps, all charged in connection with the death of Baha Musa, a hotel receptionist in Basra, is due to start in September.

Ministry of Defence sources insisted last night that the court martial system had worked effectively in the latest trial, and said that the judge had not made any criticisms of the prosecution?s case.

However, the MoD has accepted that the military system has to be changed radically to bring it closer to civilian prosecution procedures. A new Armed Forces Bill which will lead to the creation of a tri-Service military prosecution authority ? getting rid of the present single-service arrangement ? is currently going through Parliament. A second reading is due in the Commons next week.

The acquittals yesterday followed an admission in court that the policy of ?wetting? looters, forcing them into dykes and ditches as punishment, was a widespread and appeared to have been approved higher up the chain of command. 
 
In a statement the MoD said: ?Our soldiers are not above the law and must operate within strict legal guidelines at all times. The Army takes all allegations of failure to do so extremely seriously.

?It is only right and proper that they are fully investigated and, where appropriate, the evidence is tested in court. In this case that process is now complete and the soldiers are able to resume their military careers with the continuing support of the Army and their regiments.? 
 
The MoD said its thoughts were with Mr Khareem?s family ?at this very difficult time?.

Cheers erupted in court as the men were found not guilty. Jerry Hayes, counsel for Guardsman McGing, said after the case: ?If ever there was a trial that should have been strangled at birth, it was this one. Three brave, decent young soldiers who sacrificed everything to free a ravaged people were hung out to dry. I sincerely hope the Attorney General reviews all pending cases to ensure that no British soldier is brought to trial on the flimsiest evidence.

The only substantial evidence against these men was the word of a self-confessed looter.?

There were tears as Guardsman McCleary shook the hand of Lieutenant-Colonel Michael O?Dwyer, commanding officer of the Irish Guards.

Guardsman McCleary said: ?Justice was served. I am just glad it?s all over. It?s been heartbreaking. I haven?t been able to lead my life.?

He embraced Guardsman McGing, who left it to his fiancee, Kerry Hensman, to comment. Miss Hensman, 21, said: ?It?s brilliant. It?s been terrible for the last three years. I never had any doubt about his innocence.?

Fadi Dauod, solicitor for Guardsman McGing, described it as ?an ill-conceived case which should never have been prosecuted?.

He added: ?The outcome is a complete vindication of a fine young man who has served his country admirably in a difficult environment without any proper training.?

Last night Haidar Mussawi, a leading Iraqi National Congress official, said: ?The message people get from this is there is no respect for the lives of the Iraqi people.?