Lawyers representing the family of Sabiha Khudur Talib, the 62-year-old Basra woman allegedly tortured and executed by British forces in 2006, have called for a full independent investigation.
She was killed during a house raid in Basra in November 2006 by British troops, but the MoD claims that Ms Talib was killed "in crossfire" and later died at a military hospital.
But her son Raad Gatii Karim said that his mother was uninjured as she was led outside by troops.
"I then saw a soldier hit her on her back with the butt of a rifle. The soldiers pulled the blanket off her legs, wrapped this around her and shoved her into the APC (armoured personnel carrier)," he said.
Later that day, the Iraqi police said, they received a telephone call from British forces informing them that the body of a woman had been found "dumped" on Basra's al-Zubayr highway.
The body, contained in a British body bag, was that of Ms Talib.
The police reports document "traces of torture" and a bullet entry wound to her abdomen.
Phil Shiner of Public Interest Lawyers said: "Our clients and the Iraqi police are absolutely clear that Sabiha was taken away alive and later found dead, having been tortured and dumped in a British body bag on the al-Zubayr highway.
"The MoD cannot dismiss these allegations with the claim, unsubstantiated by any investigation, that she was injured in crossfire and later died in a military hospital.
"The evidence points to a brutal murder and not to a tragic accident."