The Bangladeshi government has allowed a British-trained paramilitary force to secretly detain, torture and kill hundreds of people with impunity over the past two years, a report warns.

The report, released by the New York-based NGO, Human Rights Watch, catalogues a series of extrajudicial killings, forced disappearances and deaths in custody of the Rapid Action Battalion. Citing a lack of redress for victims, and the government's dismal record of failing to prosecute a single perpetrator, the NGO has called on the Bangladeshi government to disband the RAB and for the UK and US to withdraw support unless they take active steps to hold the force to account.

Torture methods listed in the report include burning with a hot iron, and beatings so severe that a victim's legs were "smashed and did not retain their usual shape; they were flattened". Mahabub Khokon told researchers that when he collected the body of his brother, Mohiuddin Arif, from the morgue after he was arrested by the RAB in February last year, repeated assaults had turned his legs green, skin had been scraped off several areas of his body, and his feet were swollen and looked as if they were "falling apart".

The 54-page report cites another instance from March this year, when a 34-year-old shopkeeper, Rasal Ahmed Bhutto, was picked up in the street outside a friend's shop in the capital, Dhaka, by men in plain clothes. A week later he was found shot dead and slumped against a nearby wall.

British police have helped train RAB teams since 2007, around the time that UK intelligence agencies began seeking closer counter-terrorism co-operation with the RAB and Bangladeshi intelligence agencies. On Monday, a Foreign Office spokesman said the UK government raised issues of human rights abuses by the RAB "at every opportunity". He added: "We are not currently providing any training for the RAB at all."

The HRW report details how nearly 200 people have been killed in RAB operations since the Awami League government came to power in January 2009. Asia director, Brad Adams, commented how the party had pledged to end extrajudicial killings while in opposition. He said: "After two years in office, the government has had more than enough time to take action to stop the RAB's murderous practices. A death squad is roaming the streets of Bangladesh and the government does not appear to be doing anything to stop it."

In December, the Guardian reported on US diplomatic cables leaked by Wikileaks which revealed that British police officers from the National Policing Improvement Agency had been travelling to Dhaka to train members of the RAB in "investigative interviewing techniques" and "rules of engagement".

The US and UK view the RAB as their most effective counter-terrorism partner in the region and have expressed a strong interest in increasing co-operation, according to Human Rights Watch.

The Foreign Office defended themselves against the ensuing outcry by saying the NPIA had been training RAB in human rights and ethical policing. However, a course in counterterrorism which had been scheduled to take place in January was then cancelled due to a "lack of trainers", according to officials. The Guardian has learned that Anthony Layden, Britain's former ambassador to Libya, had been lined up for the training.