Blackwater, the US private military contractor widely accused of abuse of power in Iraq, is getting out of the security business.

Company executives said they are moving away from security work in the wake of close media scrutiny of private contractors' behaviour in Iraq, particularly a Baghdad shooting involving Blackwater employees that left 17 Iraqi civilians dead. The incident is under investigation by American law enforcement.

"The experience we've had would certainly be a disincentive to any other companies that want to step in and put their entire business at risk,'' Blackwater founder and chief executive Erik Prince told an Associated Press reporter who was given a daylong tour of the company's headquarters.

Anne Tyrrell, a Blackwater spokesman, said the company has not planned any "shift," but rather that the company would grow in other areas besides private security.

"When we are seeking to expand the business we will be doing it in other area," she said. "We don't see that market growing".

Blackwater has made hundreds of millions of dollars off of contracts to guard US state department officials. Its seemingly ubiquitous presence, combined with the larger-than-life personality of the conservative Prince, turned Blackwater into an emblem for the privatised military that the Bush administration relied upon to help wage the Iraq war.

The company also operated under broad legal immunity from criminal prosecution in Iraq, attracting criticism from government officials in Washington as well as Baghdad. The US Congress ultimately passed legislation bringing contracting firms under the American military code of justice.

Blackwater's now plans to focus attention on its expansive rural training facilities. Its North Carolina home attracts swarms of US military, law enforcement and local officials each year.

The company also has expanded its aviation division, which provides airplane and helicopter maintenance and also drops supplies into hard-to-reach military bases. A 6,000-foot runway is under construction and a large map in the company's hanger shows units based across the world, from Africa to the Middle East to Australia.

"Our focus is away from security work. We're just not bidding on it," Blackwater president Gary Jackson told the Associated Press.

The debate over how much of military operations should be turned over to for-profit firms has also touched on contractors' ability to protect its own employees. Four Blackwater workers were murdered in 2004 in the Iraqi city of Fallujah, then a hotbed of violence, and seven more died in a roadside bomb attack a year later.

Five British private contractors, including IT consultant Peter Moore, were kidnapped from the Baghdad finance ministry by a Shiite militant group 14 months ago. Anguish over their plight flared this week after reports that one of the hostages succumbed to depression and killed himself while in captivity.

