Ruling in Strasbourg says Britain was occupying force and thereby took on judicial role of sovereign government

Britain was an occupying power after the invasion of Iraq and failed to carry out effective investigations into the killing of civilians, the European court of human rights has ruled.

The decision by the Strasbourg court could open the Ministry of Defence to a deluge of claims and add to the pressure for further public inquiries into the behaviour of troops in and around Basra after the 2003 invasion.

By extending liability beyond the UK's territorial limits and outside Europe, the ruling will have far-reaching implications for military operations around the world.

The case was brought by the Birmingham-based firm Public Interest Lawyers on behalf of Iraqis who claimed their relatives had been variously shot dead, raped, disappeared or tortured by British soldiers between 2003 and 2006.

In its judgment, the court said: "Following the removal from power of the Ba'ath regime and until the accession of the Iraqi interim government, the United Kingdom (together with the United States) assumed in Iraq the exercise of some of the public powers normally to be exercised by a sovereign government.

"In particular, the United Kingdom assumed authority and responsibility for the maintenance of security in south-east Iraq. In those exceptional circumstances, a jurisdictional link existed between the United Kingdom and individuals killed in the course of security operations carried out by British soldiers during the period May 2003 to June 2004.

"Since the applicants' relatives were killed in the course of United Kingdom security operations during that period, the United Kingdom was required to carry out an investigation into their deaths."

Among those who died was Hazim Al-Skeini, 23, who was shot dead by a British army patrol. In his witness statement, his brother explained that on 4 August 2003 members of his family had been in the village of al-Majidiyah for a funeral.

"In Iraq, it is customary for guns to be discharged at a funeral," the court said. "He stated that he saw soldiers shoot and kill his brother and another man – both unarmed and only about 10 metres away from the soldiers – for no apparent reason."

The court found there had not been an effective investigation into five of the killings. It noted that, in contrast, the UK has held an inquiry into the death of Baha Mousa, a hotel worker who died while in the custody of British troops in 2003. A report on the findings is due in the autumn.

The UK was ordered to pay damages to five of the applicants €17,000 (£15,200) each and awarded a total of €50,000 in costs and expenses.

The Strasbourg court also ruled in a second case, Al Jedda v United Kingdom, that the indefinite detention of a dual British-Iraqi citizen in a Basra facility run by UK forces was illegal.

Hilal Abdul-Razzaq Ali al-Jedda, 53, was detained for three years. The army claimed he was responsible for recruiting terrorists outside Iraq to commit atrocities there but no criminal charges were brought against him.

Eric Metcalfe, director of the human rights group Justice, said: "The rulings send out two clear messages. The British government's duties under human rights law do not stop at Dover, and they cannot be easily displaced by rulings of the UN security council. This is a good day for the international rule of law."

Phil Shiner, who led the team at Public Interest Lawyers, said: "This is a monumental judgment ... and an important day for our clients, many of whom can now force what the MoD has long-denied them – a public inquiry uncovering the truth about what the British army did to them and their loved ones."

Jim Duffy, another of the victims' solicitors added: "The court's judgment sends a clear message: wherever soldiers or other state agents act, they must do so while upholding, not violating, human rights. The violence, religious degradation, sexual abuse and, in many cases, gratuitous killing suffered by our clients must now be confronted."