A former contractor for a UK-based public relations firm says that the Pentagon paid more than half a billion dollars for the production and dissemination of fake Al-Qaeda videos that portrayed the insurgent group in a negative light.

The Bureau of Investigative Journalism reported that the PR firm, Bell Pottinger, worked alongside top US military officials at Camp Victory in Baghdad at the height of the Iraq War. The agency was tasked with crafting TV segments in the style of unbiased Arabic news reports, videos of Al-Qaeda bombings that appeared to be filmed by insurgents, and anti-insurgent commercials – and those who watched the videos could be tracked by US forces.

The report of Bell Pottinger’s involvement in the video hearkens back to more than 10 years ago, when the Washington-based PR firm Lincoln Group was revealed to have produced print news stories and placed them in Iraqi newspapers. According to the Los Angeles Times, who obtained the 2005 documents, the stories were intended to tout the US-led efforts in Iraq and denounce insurgent groups.

The key players in the Iraq War Show all 11 1 /11 The key players in the Iraq War The key players in the Iraq War Jack Straw Jack Straw was the UK foreign secretary at the time of the Iraq invasion, and fully endorsed the decision Getty The key players in the Iraq War Geoff Hoon Geoff Hoon was Tony Blair’s defence secretary from October 1999 to May 2005 Getty Images The key players in the Iraq War Alastair Campbell Alastair Campbell was involved in the drafting of two Downing Street dossiers on the war, in September 2002 and in February 2003 Getty The key players in the Iraq War John Scarlett John Scarlett was chairman of the Joint Intelligence Committee at the time of the 2003 invasion Getty Images The key players in the Iraq War Peter Goldsmith Peter Goldsmith was Mr Blair’s attorney general from 2001 to 2007 AFP/Getty Images The key players in the Iraq War Condoleezza Rice Condoleezza Rice was named as National Security Advisor to George W Bush in 2000, becoming the first woman to occupy the post, and argued publicly in favour of the 2003 invasion Getty Images The key players in the Iraq War Colin Powell Colin Powell was Secretary of State from 2001 to 2005 Getty Images for TIME The key players in the Iraq War Tommy Franks Tommy Franks was the leading US general at the start of the Iraq war The key players in the Iraq War Dick Cheney Dick Cheney was George W Bush’s vice president from 2001 to 2009 Getty Images The key players in the Iraq War Paul Bremer Paul Bremer ran Iraq for 14 months after the invasion, appointed Bush’s Presidential Envoy in charge of the occupying forces Getty Images The key players in the Iraq War Hans Blix Hans Blix was the UN weapons inspector tasked with monitoring Iraq from 2002 to 2003 Getty Images

Bell Pottinger was first tasked by the interim Iraqi government in 2004 to promote democratic elections. They received $540m between May 2007 and December 2011, but could have earned as much as $120m from the US in 2006.

Lord Tim Bell, a former Bell Pottinger chairman, confirmed the existence of the contract with the Sunday Times. The Pentagon also confirmed that the agency was contracted under the Information Operations Task Force, but insisted that all material distributed was “truthful”.

However, former video editor Martin Wells, who worked on the IOTF contract with Bell Pottinger, said they were given very specific instructions on how to produce the fake Al-Qaeda propaganda films.

“We need to make this style of video and we’ve got to use Al-Qaeda’s footage,” Mr Wells told the Bureau, recalling the instructions he received. “We need it to be 10 minutes long, and it needs to be in this file format, and we need to encode it in this manner.”

According to Mr Wells’ account, US Marines would then take CDs containing the videos while on patrol, then plant them at sites during raids.

“If they’re raiding a house and they’re going to make a mess of it looking for stuff anyway, they’d just drop an odd CD there,” he said.