The Army has paid out £390 to the family of an eight-year-old Iraqi girl who was killed after being hit by a bullet fired by a British soldier, The Independent on Sunday can reveal.
Hanan Saleh Matrud died in an alleyway near her home in northern Basra after a British soldier with the King's Regiment opened fire nearby. The ricocheting bullet left a deep wound across her stomach, and she later died in hospital.
The soldiers claim they fired a warning shot in the air after being targeted by "heavy stone-throwing" by mobs. Local eyewitnesses dispute the claim, and allege that only children were in the streets.
The Army admitted the shot "possibly" caused her injury and paid her parents $700, but without admitting responsibility for her death. Defence ministers claim such unofficial payments were set after consulting local Iraqi judges, but admit the scheme is now being overhauled.
However, the payment has provoked another row over the conduct of British soldiers in Iraq.
The Plaid Cymru MP Adam Price said: "Payments like these add insult to the terrible injury her family has suffered. The army seems to have an ad hoc way of valuing a human life."
The case comes as ministers wait to hear the outcome of a landmark High Court hearing last week into allegations that British forces broke the Human Rights Act in Iraq, by failing to carry out independent inquiries into 37 cases were civilians were killed or tortured by British troops.
One of the cases involves the death of the hotel receptionist Baha Mousa in British detention a case first revealed by The Independent on Sunday earlier this year.