A landmark public inquiry concluded that father-of-two Baha Mousa, 26, died after an "appalling episode of serious gratuitous violence" meted out by members of 1st Battalion the Queen's Lancashire Regiment (1QLR).
Inquiry chairman Sir William Gage said a number of British officers who could have stopped the abuse, including 1QLR's former commanding officer Colonel Jorge Mendonca, bore a "heavy responsibility" for the "grave and shameful events".
He also strongly criticised the "corporate failure" by the Ministry of Defence that led to "conditioning" techniques banned by the UK in 1972, including hooding and making prisoners stand in painful stress positions, being used by soldiers in Iraq.
The £13 million public inquiry, which published its 1,400-page final report today, condemned the "lack of moral courage to report abuse" within Preston-based 1QLR.
It named 19 soldiers who assaulted Mr Mousa and nine Iraqis detained with him, and found that many others, including several officers, must have known what was happening.
The damning report said the violence could not be described as a "one-off" because of evidence that 1QLR troops abused and mistreated Iraqi civilians on other occasions.
Lawyers for Mr Mousa's family called for the soldiers responsible for his death to face charges in the light of the findings.
Seven members of 1QLR, including Col Mendonca, faced allegations relating to the mistreatment of the detainees at a high-profile court martial in 2006-07.
The trial ended with them all cleared, apart from Corporal Donald Payne, who became the first member of the British armed forces convicted of a war crime when he pleaded guilty to inhumanely treating civilians. Payne was acquitted of manslaughter.
The legal team for Mr Mousa's relatives and the other detainees believe that evidence in the inquiry's report could form the basis for a new prosecution.
Sapna Malik, from law firm Leigh Day and Co, said: "In light of the cogent and serious findings by Sir William Gage, we now expect that the military and civilian prosecuting authorities of this country will act to ensure that justice is done."
The Crown Prosecution Service said the inquiry's report had not been referred to it. The Service Prosecuting Authority, which brings military prosecutions, was not available for comment.
Hotel receptionist Mr Mousa sustained 93 separate injuries, including fractured ribs and a broken nose, while in the custody of 1QLR in Basra, southern Iraq, over 36 hours between September 14 and 15 2003.
The inquiry concluded that his death was caused by a combination of his weakened physical state - due to factors including the heat, exhaustion, his previous injuries and the hooding and stress positions he was subjected to by British troops - and a final struggle with his guards.
It found that Payne violently assaulted Mr Mousa in the minutes before he died, punching and possibly kicking him, and using a dangerous restraint method.
Sir William said Payne was a "violent bully" who inflicted a "dreadful catalogue of unjustified and brutal violence" on Mr Mousa and the other prisoners and encouraged more junior soldiers to do the same.
Even after Mr Mousa's death the other detainees continued to suffer abuse, with some of the troops forcing them to dance "like Michael Jackson", the inquiry found.
The report concluded that Col Mendonca's failure to prevent his soldiers' use of conditioning methods on detainees was "very significant".
Sir William accepted the officer's evidence that he did not know about the abuse of the prisoners in a makeshift detention centre in the middle of 1QLR's base in Basra.
But he added: "As commanding officer, he ought to have known what was going on in that building long before Baha Mousa died."
Sir William found that two 1QLR officers - Lieutenant Craig Rodgers and Major Michael Peebles - were aware that Mr Mousa and his fellow detainees were being subjected to serious assaults by more junior soldiers.
He strongly criticised Lt Rodgers, who commanded the group of soldiers who guarded the prisoners for most of their time at 1QLR's camp.
"It represents a very serious breach of duty that at no time did Rodgers intervene to prevent the treatment that was being meted out to the detainees, nor did he report what he knew was occurring up the chain of command," he said.
"If he had taken action when he first knew what was occurring, Baha Mousa would almost certainly have survived."
The chairman said "on any view" Major Peebles, who was responsible for the detainees' welfare and was still in the Army when he appeared before the inquiry in December 2009, should have put a stop to the use of hooding and stress positions long before Mr Mousa's death.
The report also singled out 1QLR's Catholic chaplain, Father Peter Madden, for stringent criticism, finding that he visited the detention centre on the day Mr Mousa died and "must have seen the shocking condition of the detainees".
Sir William said: "He ought to have intervened immediately or reported it up the chain of command, but in fact it seems he did not have the courage to do either."
The General Medical Council confirmed that 1QLR's senior medical officer, Dr Derek Keilloh, is facing a disciplinary hearing next year after he was criticised in the report over his claim that he saw no injuries on Mr Mousa's corpse.
The wide-ranging two-year public inquiry also heard evidence about the question of why British soldiers serving in Iraq employed five detainee-handling techniques, including hooding and stress positions, outlawed by former Prime Minister Edward Heath more than 30 years earlier.
Sir William said by the time of the Iraq invasion in March 2003 knowledge of the ban on the "wholly unacceptable" interrogation methods had largely been lost because of a "corporate failure of the MoD".
He said: "If the ban on the five techniques had not been lost, and had it in 2003 been the subject of policy, doctrine and training, it is in my view inconceivable that hoods and stress positions would have been used on these detainees."
Defence Secretary Liam Fox said Mr Mousa's death was "deplorable, shocking and shameful" and revealed he had asked the head of the Army, General Sir Peter Wall, to consider what action can be taken against serving soldiers criticised in the report.
But he rejected the inquiry's call for the MoD to ban the use of the verbally threatening "harsh approach" in tactical questioning, the immediate interrogation of suspects to obtain valuable intelligence.
Gen Wall said Mr Mousa's death had cast "a dark shadow" on the British Army's reputation.
The MoD agreed in July 2008 to pay £2.83 million in compensation to the families of Mr Mousa and nine other Iraqi men abused by British soldiers.
The lawyers for Mr Mousa's family have separately launched a legal bid to force the Government to launch a wider-ranging public inquiry into allegations that more than 100 other Iraqi civilians were abused by UK troops during the 2003-2009 war.
PA
