By Luke Baker

LONDON, June 6 (Reuters) - The family of an Iraqi civilian who died while in British military custody in Iraq nearly four years ago is to sue the Ministry of Defence for damages, a lawyer representing them said on Wednesday.

Martyn Day, a personal injury lawyer, said he had no other choice than to sue the Ministry of Defence after a court martial earlier this year cleared seven British soldiers of any involvement in the death of hotel receptionist Baha Musa.

Only one soldier, Corporal Donald Payne, was convicted after pleading guilty to mistreating prisoners and was sentenced to a year in jail, becoming Britain's first convicted war criminal.

"Since the transcripts were made available from the court-martial hearing we've been in a position where we can properly take witness statements from the other victims who were with Baha Musa and build a case," Day told Reuters.

"I expect to be able to present a claim against the Ministry of Defence in the High Court in the next couple of weeks."

In reaction the Ministry of Defence said: "Baha Musa should not have died when he was in our custody. The MoD has accepted responsibility for his death and we have already made an interim compensation payment to his father."

Day said he would be seeking punitive damages that he estimated could be worth several hundred thousand pounds.

"The nature of this is so extraordinary that we will be calling on the court to basically make an example of the Ministry of Defence in this case, to show that this sort of thing should not be allowed to happen," he said.

Musa, who was 26 years old when he died, was detained along with several other Iraqis when British troops raided a hotel in the southern city of Basra in September 2003.

Those held were kept blindfolded, put in stress positions and beaten during 36 hours of detention. Musa died after suffering 93 injuries, including a broken nose and ribs.

Musa's two children were left orphaned by his death as his wife had died two months earlier of a brain tumour.

Day said he had contacted the Ministry of Defence seeking to settle the matter out of court but had received no reply.

"Apart from providing us with documentation from the court martial, we've heard next to nothing," he said.

Baha Musa's father, Dawoud Musa, a former colonel in the Iraq police force, said he hoped the case would finally achieve some justice and potentially secure funds to ensure his grandchildren could be looked after and educated.

"We want justice, we want to make sure that justice is achieved," he told Reuters, speaking through a translator.

"We see that the court martial was not a proper court at all -- it was biased by its very definition as it was carried out by the Ministry of Defence against its own people, which cannot be fair. The British army is not going to prosecute its own."

"I would like to see some compensation for the grandchildren -- providing them with an education would repay them a little bit of what could have been provided to them by their father if he had not been tortured to death in British detention."

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