British soldiers involved in the death of an Iraqi detainee and the unlawful abuse of others were not just "a few bad apples" but were implementing official government policy, an inquiry into the killing of Baha Mousa, a Basra hotel receptionist, heard .

Lawyers representing Mousa and those acting for more than 150 British troops blamed the incidents on senior officers, ignorance of the law, poor training and the "extraordinary" conditions in which the soldiers had to work.

Mousa, 26, died after being subjected to beatings that left him with 93 separate injuries. One of the other detainees recalled hearing him scream in agony shortly before he died at Battle Group Main camp on the evening of 15 September 2003, Rabinder Singh QC, for the Mousa family, told the inquiry in London.

Mousa cried out: "Oh my God, I'm going to die, I'm going to die. Leave me alone, please leave me alone for five minutes. I am very tired. I am going to die." Singh added: "Baha was a human being, yet to his guards he was known as 'fat boy' or 'fat bastard'. To British soldiers, Iraqi civilians were routinely known as 'Ali Babas'."

Singh continued: "It is important not to fall into the trap of thinking that this case was simply one of indiscipline … This case is not just about beatings or a few bad apples. There is something rotten in the whole barrel."

The inquiry has heard that British troops holding him and nine Iraqis seized with him employed "conditioning" methods such as hooding, sleep deprivation and forcing suspects to stand in painful "stress positions", which the government banned in 1972. They were prohibited after the European court of human rights declared the practices, used in Northern Ireland against IRA suspects, unlawful.

"Conditioning" was "a euphemism for torture", Singh said. His argument was later challenged by counsel for some of the soldiers.

"One of the striking features of the terrible events is that the abuse did not take place in a secret location behind closed doors," said Singh. "The temporary detention facility was open to the outside. Many people must have seen or heard what was going on. Many seem to have visited [it]."

He added: "This gives rise to serious questions about the professionalism of the outfit and whether the culture was one of impunity. It also gives rise to serious questions about the capacity of the [Queen's Lancashire] regiment's members to question and challenge abuse."

David Barr, counsel for the Ministry of Defence, said the "appalling" behaviour of British soldiers in the case had "disgusted" the army. Mousa and those detained with him were "clearly subjected to brutal violence as well". He continued: "Conditioning techniques alone do not cause such injuries. The brutality was completely unacceptable. It has stained the reputation of the British army." However, James Dingemans QC, for 24 British soldiers, questioned whether the Iraqi detainees could be described as civilians. After they seized the Iraqis, soldiers had discovered at Basra's Ibn al-Haitham hotel AK-47 rifles, ammunition, a submachine gun, pistols, grenades, electrical equipment, and the telephone numbers of Iraqi intelligence officers from Saddam Hussein's regime.

Dingemans added that the statute setting up the international criminal court provided a defence for soldiers, including those who did not know that their orders were unlawful. Neil Garnham QC, representing other soldiers and military officials, described the conditions, including the 50C heat in which British troops operated in Iraq, as "extraordinary". He added: "Such difficult conditions excuse nothing but they may explain a good deal."

He added: "The army does not decide whether to go to war. It has precious little to say about when it goes to war. It has no control at all over the conditions in which it fights, the enemy it faces or about the conditions with which it has to contend when the fighting is over."

Corporal Donald Payne pleaded guilty at a six-month court martial on the incident in which all other soldiers were acquitted. His barrister, Michael Topolski, said that for "too long" Payne had been the only soldier to take responsibility for what occurred. He pointed to evidence in the military trial referring to the "closing of ranks" and a "wall of silence", and alleged a cover-up and attempts to blame Payne alone.

The MoD agreed in July last year to pay £2.83m in compensation to the families of Mousa and nine other Iraqi men mistreated by British troops. Mousa's father, a former colonel in the Iraqi police, is due to give evidence to the inquiry .