The new accord, part of a hotly disputed Status of Forces Agreement (SOFA) that will govern the legal standing of US forces in Iraq after the current United Nations mandate expires in December, will affect tens of thousands of bodyguards — many of them British — working in the country.

Hoshyar Zebari, the Foreign Minister, said the Americans had agreed to drop the immunity as part of their more “flexible” approach in talks that have sparked anger among many Iraqis, who see the security deal as an effort to extend US control over the country.

Immunity for the sprawling army of foreign guns for hire has been a sensitive issue for years. Many Western bodyguards have been notoriously trigger-happy, and on one occasion even posted on a website a film of one group shooting innocent Iraqi drivers from the back of their armoured vehicle. The issue of accountability came to the fore last September when guards working for Blackwater, an American company under contract to the US State Department, shot dead 17 Iraqi civilians in Baghdad.

A Western security contractor told The Times the new rules would impact hardest on high-profile groups like Blackwater, operating out of the green zone fortified government compound in the heart of the Iraqi capital.

“The big American companies view themselves to be above the law anyway,” said the contractor, who asked not to be named. “At the moment they just regard everyone who comes near them as a threat and are happy to light them up.”

The contractor said that professional standards had plummeted as many security companies rushed to respond to massive demand in Iraq, as the huge reconstruction contracts continued to come on the market despite the surging violence. There has also been an endless supply of ex-army men looking for a well-paid life of adventure.

“If you are a member of the British Army on £16,000 a year in Afghanistan and Iraq and you can get £70,000 a year to do two months on and one month off in Iraq, you’ll jump at the chance,” the contractor said.

Companies will have to invest more in training their operatives, he said, noting that the rules of engagement were already changing as security slowly improved in the country.

In some calmer provinces, operators have already been ordered to remove signs on the rear of their vehicles threatening to shoot any driver who comes within 100 metres, and have replaced them with less hostile signs saying “Wait until indicated to pass”.

But bringing to book any Western security guards accused of shooting civilians would be difficult, the contractor noted. “If it’s someone like Blackwater, nine times out of ten the individual is spirited out of the country,” he said.

Such legal problems are also dogging the general Status of Forces Agreement, said Mr Zebari, a Kurdish leader. He said the main sticking points in negotiations centred on who would have the final say on authorising military operations, whether US forces would be allowed to detain Iraqi citizens, and if Iraqi or US law would apply to US soldiers who accidentally killed Iraqis.

“There has been a great deal of flexibility,” said Mr Zebari, stressing that the security agreement would only be for a short term of a year or two and urging parliament to back the agreement when it is finalised.

“We are talking about a strategic framework agreement that will improve co-operation between Iraq and the US on a whole range of issues . . . we have almost finalised the document,” he said, adding that if no agreement was reached soon, the present UN Security Council mandate could be extended or that Iraq and the US could seek an interim protocol to prolong current security arrangements.

The Times