Four other marines were charged for allegedly trying to cover up the killings.

The leader of the Marine squad, Sgt Frank Wuterich, 26, was yesterday charged with killing 12 Iraqis and ordering his men to kill six others after allegedly telling them to "shoot first and ask questions later" when they entered the building. The killings ­ which the Iraqi prime minister Nouri al-Maliki called "a terrible crime" ­ have led to the biggest criminal case involving the deaths of Iraqis since the invasion of Iraq in the spring of 2003.

A full investigation into the killings in November last year was only launched in March 2006 after a US magazine reported the claims of survivors that two dozen innocent people had been killed. The marines initially said that they had killed eight insurgents and that the other Iraqis had been killed by a roadside bomb.

Announcing the charges, Col Stewart Navarre yesterday told reporters that the initial reports had been false. "The reporting of the incident up the chain of command was inaccurate and untimely," he said.

The Iraqi witnesses said the marines had shot them an act of retaliation for the death of one a colleague, L/Cpl Miguel Terrazas ­ killed by a roadside bomb as the squad's convoy passed through Haditha, 60 miles north of Baghdad. Video footage shot by an Iraqi journalist, Taher Thabet, founder of a human rights group, showed the bodies of women and children with gunshot wounds and bloodstains on the floor of the house.

Eman Waleed, a nine-year-old child who claimed to have witnessed the incident, described the US marines entering their house. She told Time magazine: "I couldn't see their faces very well ­ only their guns sticking into the doorway. I watched them shoot my grandfather, first in the chest and then in the head. Then they killed my granny."

Earlier this year Representative John Murtha said the troops had " killed innocent civilians in cold blood".

Yet defence lawyers dispute those claims. They said the troops from Kilo Company, 3rd Battalion, 1st Marine Regiment, 1st Marine Division were engaged in a fierce gun battle in the city after the bomb exploded. They say that civilians may have died during the chaos.

Sgt Wuterich's lawyer, Mark Zaid, said the charges carried a maximum penalty of life in prison and did not allege that the killings were pre-meditated.

The other three marines charged with murder were Sgt Sanick Dela Cruz, L/Cpl Justin Sharratt and L/ Cpl Stephen Tatum.

Critics of the war last night welcomed the charges but said the process highlighted serious flaws in the operation of the US forces in Iraq. Hany Khalil, a spokesman for the group United For Peace and Justice (UFPJ) said only relatively junior officers had been charged ­ a pattern repeated in other inquiries ­ and not senior officers, who also bore responsibility for putting the US troops in "atrocity-producing situations". He added: "In addition, a case has to get a huge media profile to get any attention. Iraq is supposedly a sovereign nation but the US never allowed the government any jurisdiction over US soldiers or mercenaries who are there."

Having been charged, the eight defendants will now proceed to a Article 32 hearing in which a military judge will decide if there is sufficient evidence to convene a full court martial. A date for that hearing has not been set. The Haditha case is just one of a number of such cases to have emerged from the Iraq war.