Iraqi National Security Adviser has admitted that insurgents have infiltrated Iraq's police force.
Muwafaq al-Rubaie's revelation comes after British troops broke into a police station in the southern city of Basra to rescue two of their soldiers on Monday, only to find out they had been handed over to Shiite militants.
He told the BBC's Newsnight programme that he did not know how deep the infiltration problem went, but said it involved "many parts of Iraq".
The Iraqi government has opened an investigation into the incident in Basra and Iraqi prime minister Ibrahim al-Jafaari was due to meet British defence minister John Reid on Wednesday to discuss the growing tension between British troops and the local authorities in Basra.
The two British soldiers, who are both thought to be members of the elite SAS special forces working undercover, were arrested for allegedly shooting two Iraqi policemen, one of whom died. British tanks outside the police station where the soldiers were being held were attacked by an angry mob hurling petrol bombs and stones and TV pictures showed soldiers escaping the burning vehicle, their uniforms on fire.
The Iraqi government says it ordered the police in Basra to release the troops, but were ignored and they were handed over to a Shiite militia group instead. The men were finally freed when British troops stormed the house where they were being held.
Al-Rubaie criticised the way the British army released their men, saying negotiation would have been better than force. "They could have been freed in a much more peaceful, much more friendly and amicable way than that," he said.
However, he admitted that there was a problem in the Iraqi police forces, the AKI reports.