A former SAS soldier says the Ministry of Defence (MoD) has failed to fully investigate an incident where nine Iraqi police officers were paid £800,000 compensation after claiming they were strangled, beaten and told they would be killed.

The MoD made the payout after a group of SAS soldiers were in Majar Al-Kabir where six British military policemen, known as Red Caps, were killed in 2003.

A soldier involved in the operation to find out how and why the six men were killed claimed violence was only used so the SAS team would not suffer the same fate as the Red Caps after a riot broke out in a police station.

"We fought back to defend ourselves," the former soldier said told The Times.

"We behaved admirably and if anyone deserves anything out of this it was our apostle [the name given to an Iraqi expert with the team] who got the s*** kicked out of him. Where is his compensation?

"The only reason for violence was for us to get safely from the police station. I am sure people were injured in that fight because we were. We were just fighting for our lives."

The claim is the latest turn relating to alleged historic abuse by British military members during the 2003 Iraq War.

Although the £800,000 pay-out was made independently of the Iraq Historic Allegations Team's work, it has now been heavily criticised by Conservative MPs.

Julian Brazier, a Tory MP and former member of a reservist regiment of the SAS, told The Times: "I am deeply concerned to hear that this large payment was made without a full investigation at the time and without seeking to rebut these allegations made against people who were risking their lives in a very dangerous situation."

Johnny Mercer, also a Tory MP and former Army officer, added: "It is outrageous. We are in danger of breaking the bond between the military and their political masters when you see this sort of behaviour going on."

Theresa May promised in September to end the "industry of vexatious allegations" against British troops who took part in the Iraq War and said the European Convention on Human Rights would not apply to them.

Speaking at the Conservative Party conference, she said: "We will never again in any future conflict let those activist left-wing human rights lawyers harangue and harass the bravest of the brave, the men and women of our Armed Forces."

However, Geoffrey Robertson QC, a former United Nations' appeals judge, said to The Independent that May's rhetoric was becoming "increasingly ignorant".

"Human rights lawyers are not necessarily either activist or left wing and they do not harass the brave – they call for the prosecutions of those cowardly soldiers who kill their prisoners and torture or murder civilians," he said.

"These actions have been war crimes for centuries and Mrs May, quite disgracefully, wants to cover them up when they are committed – and it is a matter of record that they are occasionally committed – by British forces."

A spokesman for the Ministry of Defence said: "Our armed forces are rightly held to the highest standards and we investigate credible allegations of criminal behaviour."