The family of an Iraqi teenager who was allegedly beaten to death by seven British soldiers, including one from Birmingham, wanted "blood money" for his death.

Karima Lefta al-Noukaty, aged 44, made the allegation at a court martial where the soldiers are standing trial accused of murdering 18-year-old Nadhem Abdullah.

The court has heard that Mr Abdullah is alleged to have died as a result of a "gratuitous", " unjustified" and "unprovoked" attack on a group of Iraqi civilians in al-Ferkah, 60 miles north of Basra, in May 2003.

The defendants, all members of the 3rd Battalion of the Parachute Regiment, are alleged to have used rifle butts, helmets and fists during the assault. Ms Lefta, a widow who lost her husband in "Saddam's War", yesterday told the court martial in Colchester, Essex, that Mr Abdullah's family wanted "blood money" following his death.

Anthony Chinn QC, representing Private Morne Vosloo, one of the soldiers standing trial, asked Ms Lefta whether the villagers wanted compensation following the attack.

She said: "Only the boy's family, Nadhem's family wanted blood money."

Ms Lefta said that Athar Finjan Saddam, a taxi driver who also claims to have been beaten by the soldiers, wanted blood money.

On Wednesday, it emerged Ms Lefta, a mother-of-three, had lied about the injuries she sustained in the attack.

She had claimed she had been hit and pushed by a soldier with a rifle butt and received a shoulder injury.

But on Wednesday she told the hearing she had not sustained any injuries and had lied.

The court heard yesterday that Ms Lefta is being paid 100 US dollars a day for the time she spends in England at the hearing.

When asked if she had requested money to come to Britain she replied: "No, I did not ask for money but I said I would like my son to get a job."

Mr Chinn asked whether she thought she could benefit from the incident. Ms Lefta replied: "No, no, by Allah. It was for the dead. For Nadhem."

Richard Ferguson QC, representing Pte Roberto Di-Gregorio, told Ms Lefta: "You have told lies. Did you know it was wrong to tell lies ?"

She replied: "Yes, I know it was a mistake. Yes, I said, and then I regretted it."

She added: "I swore on God's word and I'm telling the truth now."

Corporal Scott Evans, 32, and Privates Billy Nerney, 24, Samuel May, 25, Morne Vosloo, 26, Daniel Harding, 25, Roberto Di-Gregorio, 24 and Scott Jackson, 26, all deny murder and violent disorder.

The trial continues.