It remained unclear whether Blackwater contractors were hired to kill terrorists or only perform other functions such as training and surveillance.

The outsourcing of highly controversial work, including prisoner interrogation, by US intelligence services during the administration of former president George W. Bush, has raised concerns among officials over accountability, the paper said.

North Carolina-based Blackwater received millions of dollars in US government contracts for providing security in Iraq, but Iraqi authorities refused to give the company an operating licence following a shooting in Baghdad in 2007 in which Blackwater employees opened fire on civilians and killed 17 people.