British troops mistreated nine Iraqi detainees following a fierce battle a decade ago, but false allegations of murder and torture were the product of "deliberate lies, reckless speculation and ingrained hostility", a judge-led inquiry has found.

The long-running Al-Sweady inquiry, which has cost the taxpayer almost £25 million, concluded in its final report that the conduct of some soldiers towards detainees breached the Geneva convention.

But it was highly critical of the claims it was initially set up to investigate - that Iraqi detainees had been murdered, mutilated and tortured following the Battle of Danny Boy on May 14 2004 near Al Amarah in southern Iraq.

It found that British forces responded to a deadly ambush by insurgents with "exemplary courage, resolution and professionalism".

And it suggested that some of the detainees - all described as members or supporters of the Mahdi Army insurgent group - consciously lied about the most serious allegations to discredit the British armed forces.

Delivering his final report after a five year process which began in November 2009, inquiry chairman Sir Thayne Forbes found there had been instances of ill-treatment during "tactical questioning" of the detainees at Camp Abu Naji (CAN), near Majar-al-Kabir in southern Iraq, on the night of May 14/15.

These included blindfolding the prisoners, depriving them of food and sleep and using threatening interrogation techniques contrary to the Geneva Convention.

The former High Court judge also criticised British soldiers for "tasteless trophies" such as striking poses for photos with detainees.

Sir Thayne wrote: "I have come to the conclusion that the conduct of various individual soldiers and some of the procedures being followed by the British military in 2004 fell below the high standards normally to be expected of the British Army.

"In addition, on a number of other occasions, my findings went further.

"I have come to the conclusion that certain aspects of the way in which nine Iraqi detainees, with whom this inquiry is primarily concerned, were treated by the British military, during the time they were in British custody during 2004, amounted to actual or possible ill-treatment."

Lawyers representing the alleged victims' families had already admitted during the public inquiry that there was no evidence of unlawful killing.

But they stood by claims that detainees had been mistreated at CAN and later at Shaibah Logistics Base.

Commenting on claims that British soldiers had murdered, mutilated and tortured detainees, Sir Thayne said: "The work of this inquiry has established beyond doubt that all the most serious allegations, made against the British soldiers involved in the Battle of Danny Boy and its aftermath and which have been hanging over those soldiers for the last 10 years, have been found to be wholly without foundation and entirely the product of deliberate lies, reckless speculation and ingrained hostility."

The inquiry chairman said allegations by eight of the nine detainees that they had heard and seen evidence that Iraqi men were beaten, tortured or executed near CAN were "conscious and deliberate lies".

He added: "Furthermore, having regard to how much of the evidence of these eight detainees was in common, it appears likely that their various falsehoods are the product of active collusion between them and possibly between them and one or more third parties intent on discrediting the British forces as much as possible."

He also rejected claims that Iraqis killed or taken into custody were unarmed civilians, finding that they were likely members or volunteers of a Shia insurgent group which ambushed British forces.

"I am satisfied that amongst those armed men were the 28 men who were killed in the fighting and whose names appear in the report," he said.

"Also amongst those armed men were the nine detainees who were later captured and detained by British troops at various locations on the battlefield.

"It is very likely that the nine detainees took part in the ambush and the resulting battle as actual members of volunteer supporters of the Mahdi army."

The judge also found there was no evidence to back up allegations of ill-treatment at Shaibah, including use of stress positions and the pretence that detainees were at Abu Ghraib.

His report, which will now be laid before Parliament, makes a number of recommendations including improvements to arrest records in the battlefield.