By Randall Mikkelsen

WASHINGTON, Oct 30 (Reuters) - A grant of limited immunity by State Department investigators to Blackwater security guards accused of shooting dead 17 Iraqis last month could complicate efforts to bring charges against them, a U.S. government official said on Tuesday.

The officials confirmed media reports that State Department investigators had given limited immunity protecting Blackwater guards' statements from being used against them.

But the officials said the guards could still be subject to prosecution using other evidence in the probe into the Sept 16 incident, which is now being led by the FBI.

"They have to reconstruct the case around (avoiding) the statements," that had already been given, a government official said.

Another official said the FBI investigators had not known of the immunity provisions. "Law enforcement said they didn't know what DSI (the State Department's Department of Special Investigations) was doing on the ground," he said.

The FBI took control of the investigation from the State Department early this month. Blackwater says its guards acted lawfully after being shot at, but the Iraqi government says its guards "deliberately killed" the 17 people.

The killing of the Iraqis created tensions between the Iraqi government and Washington and the Iraqi government took steps on Monday to tighter controls on private contractors.

It approved a draft law that would scrap a decree issued by the U.S.-led Coalition Provisional Authority (CPA) in 2004, before it handed over control to Iraqis, which granted foreign contractors immunity from prosecution in Iraq.

The issue of whether and how contractors could be pursued by U.S. courts is under discussion in Washington.

A State Department report by a panel of experts last week said there needed to be more "legal clarity" on the issue of their accountability. The panel said it was unaware of any basis for holding non-U.S. defense department contractors accountable under U.S. law.

North Carolina-based Blackwater has about 1,000 employees in Iraq who protect U.S. diplomats and other officials. Iraq says there are more than 180 mainly U.S. and European security companies in Iraq, with estimates of the number of private contractors ranging from 25,000 to 48,000.

U.S. Sen. Patrick Leahy of Vermont, the Democratic chairman of the Judiciary Committee, called the immunity provisions given by State Department investigators an example of a "well-worn pattern" of the Bush administration avoiding accountability.

"That seems to be a central tenet in the Bush administration -- that no one from their team should be held accountable," Leahy said.

"If you get caught, they will get you immunity. If you get convicted, they will commute your sentence. They are the amnesty Administration."

State Department spokesman Sean McCormack declined comment on the immunity reports.

"If there are individuals who broke rules, laws or regulations, they must be held to account," he said. (Additional reporting by Arshad Mohammed)

AlertNet news is provided by