By Luke Baker

LONDON, Dec 4 (Reuters) - Britain needs to tighten laws regulating private military companies operating in Iraq, where civilians are too frequently being killed or caught in the cross fire, a British charity said on Tuesday.

Dozens of British- and American-run military companies have contracts to provide security in Iraq and Afghanistan, earning tens of millions of dollars for their work but operating largely outside of local laws.

A spate of incidents in which civilians have been killed -- most notably a case in Baghdad in September in which 17 Iraqis were shot dead in a shootout involving U.S. firm Blackwater -- has heightened calls for tighter legislation.

"Private military and security companies are operating in a situation of conflict that has condemned Iraqis to considerable poverty and suffering," War on Want, a charity that tackles poverty, said in a report entitled "Getting Away with Murder".

"For Iraqis there is no distinguishable difference between private armies and foreign troops, expect that the mercenaries are operating with impunity."

The private security industry, employing hundreds of former British, American and other foreign soldiers, is estimated to be worth more than two billion pounds ($4 bln) a year.

Several of the largest companies in the sector are British, including Aegis, which recently won a new $485 million contract from the U.S. government to provide protection in Iraq.

British parliamentarians proposed tightening the regulations on the companies more than four years ago. But no legislation was forthcoming.

War on Want said action was now overdue and was supported by the British Association of Private Security Companies, a self-regulating body that represents two dozen security firms.

"There is an urgent need to bring their activities under legal and democratic control," War on Want said.

The U.S. Congress introduced new laws after the Blackwater affair, increasing oversight of its own military companies.

Iraq is trying to end immunity enjoyed by foreign security contractors and give the interior ministry power to arrest foreign security guards involved in shooting incidents.

Private security contractors have said such changes could expose them to the vagaries of the Iraqi judicial system. (Editing by Ibon Villelabeitia)

AlertNet news is provided by