An army investigation into the case, potentially one of the most damaging allegations against British troops to emerge from the war, has allegedly repeatedly been stalled by senior officers, including one of the army’s most respected generals.

But a Metropolitan police investigation is understood to have confirmed the initial suspicions of army investigators that, despite being disabled by machinegun fire, the Iraqi was shot at point-blank range.

Zahir Zabti Zaher was killed in the same incident in which Sergeant Steven Roberts died near al-Zubayr, southwest of Basra, on March 24, 2003, three days into the war. The incident became notorious when it emerged that equipment shortages had left Roberts without any body armour.

The Crown Prosecution Service is still considering whether to take the case to court, with two soldiers facing possible murder charges and one a charge of manslaughter.

The new allegations of an “execution” explain an angry exchange of letters in November 2004 between Geoff Hoon, the former defence secretary, and Lord Goldsmith, the attorney-general, over alleged attempts by senior officers to block an investigation.

Goldsmith was so concerned over the implications of the case that he took it out of the hands of the military and gave it to the Met and the civilian courts system.

Goldsmith wanted Major-General Peter Wall and other senior officers to be interviewed by the Met over what he said was evidence of “a concerted attempt by the chain of command to influence and prevent an investigation into this matter”.

Goldsmith was “extremely angry” when Hoon refused to allow Wall to be interviewed by police, one defence source said last week. More than a year later he has still not been interviewed.

The role of officers in the case goes to the heart of the attorney-general’s concerns over the lack of independence of the military police, who remain part of the army command structure and can pursue investigations only with the agreement of military commanders.

Although officers and soldiers work very closely together during military operations, officers have been charged in only one of the six investigations into alleged breaches of the Geneva conventions by British troops in Iraq.

That was in the case of Baha Musa, an Iraqi hotel worker who died in the custody of the Queen’s Lancashire Regiment. After Goldsmith’s intervention Colonel Jorge Mendonca, the battalion’s then commanding officer, and Major Michael Peebles, an Intelligence Corps interrogator, were charged with neglect.

The army Special Investigations Branch (SIB) inquiry into the killings of Roberts and Zaher was repeatedly blocked by senior officers from the very start, defence sources close to the original investigation alleged. A three-man team from 61 Section SIB sent to al-Zubayr found large numbers of spent British cartridge cases but no evidence that any Iraqis had fired any weapons. They spoke to soldiers and Iraqi witnesses to piece together what happened.

Roberts and his men from 2nd Royal Tank Regiment were in three Challenger 2 tanks manning a checkpoint just outside the the small town of al-Zubayr. They had been on the road for four days with little sleep. There was apprehension about the next phase of the battle and the possibility of paramilitary Saddam Fedayeen units operating in civilian clothes.

Roberts and his men were approached by a group of Iraqi civilians apparently angry at being prevented from going into the town. Zaher came up to the checkpoint and appeared agitated.

Roberts dismounted from his tank to try to calm him down. But Zaher threw a stone at Roberts and then another. At some point — Iraqi eyewitnesses claimed on orders from Roberts — a soldier on one of the tanks opened fire on Zaher with its 7.62 coaxial machinegun, inadvertently shooting Roberts as well.

The initial evidence suggested that, while Roberts died in the burst of machinegun fire, Zaher did not, even though his torso was riddled with bullets and one arm was virtually severed from his body.

“There were a number of suspicious markers,” one source said. But the SIB team was ordered by senior commanders to release Zaher’s body to his family, interview the soldiers as witnesses rather than as suspects, and treat the shooting of Roberts as “a tragic death in war”.

As the news of the death of Roberts emerged, attention focused on the way in which he had been ordered to hand back the ceramic plates in his body armour.

In an audio diary recorded for his wife in the days before he died, Roberts had complained that they were going to war without the equipment they needed and that it was “disgraceful” that they had “absolutely nothing”. His wife Samantha lambasted Hoon.

The death of Zaher had disappeared from view. But when the warrant officer in charge of the investigation, WO2 Phil Jackson, returned to Germany, he reported back to his immediate boss, Lieutenant-Colonel Graham Taylor, the commanding officer of SIB (Germany).

Taylor pulled strings to have the case reopened in Iraq, where SIB officers recovered Zaher’s body and an examination found that it was not the machinegun bullets that had killed him. It was two pistol shots to his head as he lay helpless on the ground.

“That evidence was very clear,” a source close to the investigation said. “He died from two pistol shots to the head. There were clear grounds to suspect an execution, ie murder. You don’t do that to a prisoner.”

Army sources have since claimed that Zaher had “Rasputin-like” strength and that Roberts fired his pistol at the Iraqi. But the source said this could not explain the head shots that would have killed Zaher instantly, meaning he would not have been hit by the machinegun fire at chest height.

Taylor went to Wall, who was general officer commanding 1 (UK) Armoured Division, and told him the decision not to investigate initially was flawed and the case now had to be reinvestigated properly.

Wall told Taylor there was no need to investigate. But Taylor was determined that the matter should be investigated and kept going back to Wall to explain why. Eventually, in September 2003, Wall wrote to the army’s most senior legal adviser, known as brigadier advisory, and asked him if SIB officers under his command could order an investigation against his express wishes. Sources say he was told not to block it any longer.

Goldsmith told Hoon that despite “clear advice”, there was correspondence showing senior officers still “intervening to prevent investigations” by the SIB for a further five months.

Wall says in a statement he remains confident that he “acted in accordance with the interests of justice and appropriate care” for the soldiers under his command.

The Ministry of Defence declined to comment.