A "trophy" video appearing to show security guards in Baghdad randomly shooting Iraqi civilians has sparked two investigations after it was posted on the internet, the Sunday Telegraph can reveal.

The video has sparked concern that private security companies, which are not subject to any form of regulation either in Britain or in Iraq, could be responsible for the deaths of hundreds of innocent Iraqis.

The video, which first appeared on a website that has been linked unofficially to Aegis Defence Services, contained four separate clips, in which security guards open fire with automatic rifles at civilian cars. All of the shooting incidents apparently took place on "route Irish", a road that links the airport to Baghdad.

The road has acquired the dubious distinction of being the most dangerous in the world because of the number of suicide attacks and ambushes carried out by insurgents against coalition troops. In one four-month period earlier this year it was the scene of 150 attacks.

In one of the videoed attacks, a Mercedes is fired on at a distance of several hundred yards before it crashes in to a civilian taxi. In the last clip, a white civilian car is raked with machine gun fire as it approaches an unidentified security company vehicle. Bullets can be seen hitting the vehicle before it comes to a slow stop.

There are no clues as to the shooter but either a Scottish or Irish accent can be heard in at least one of the clips above Elvis Presley's Mystery Train, the music which accompanies the video.

Last night a spokesman for defence firm Aegis Defence Services - set up in 2002 by Lt Col Tim Spicer, a former Scots Guards officer - confirmed that the company was carrying out an internal investigation to see if any of their employees were involved.

The Foreign Office has also confirmed that it is investigating the contents of the video in conjunction with Aegis, one of the biggest security companies operating in Iraq. The company was recently awarded a £220 million security contract in Iraq by the United States government. Aegis conducts a number of security duties and helped with the collection of ballot papers in the country's recent referendum

Lt Col Spicer, 53, rose to public prominence in 1998 when his private military company Sandlines International was accused of breaking United Nations sanctions by selling arms to Sierra Leone.

The video first appeared on the website www.aegisIraq.co.uk. The website states: "This site does not belong to Aegis Defence Ltd, it belongs to the men on the ground who are the heart and soul of the company." The clips have been removed.

The website also contains a message from Lt Col Spicer, which reads: "I am concerned about media interest in this site and I remind everyone of their contractual obligation not to speak to or assist the media without clearing it with the project management or Aegis London.

"Refrain from posting anything which is detrimental to the company since this could result in the loss or curtailment of our contract with resultant loss for everybody."

Security companies awarded contracts by the US administration in Iraq adopt the same rules for opening fire as the American military. US military vehicles carry a sign warning drivers to keep their distance from the vehicle. The warning which appears in both Arabic and English reads "Danger. Keep back. Authorised to use lethal force." A similar warning is also displayed on the rear of vehicles belonging to Aegis.

Capt Adnan Tawfiq of the Iraqi Interior Ministry which deals with compensation issues, has told the Sunday Telegraph that he has received numerous claims from families who allege that their relatives have been shot by private security contractors travelling in road convoys.

He said: "When the security companies kill people they just drive away and nothing is done. Sometimes we ring the companies concerned and they deny everything. The families don't get any money or compensation. I would say we have had about 50-60 incidents of this kind."

A spokesman for Aegis Defence Services, said: "There is nothing to indicate that these film clips are in any way connected to Aegis."

Last night a spokesman for the Foreign Office said: "Aegis have assured us that there is nothing on the video to suggest that it has anything to do with their company. This is now a matter for the American authorities because Aegis is under contract to the United States."