The Telegraph reports more definitive proof that Iran is arming insurgents with another weapon producing a serious toll of Allied and American lives.

More than 100 of the.50 calibre weapons, capable of penetrating body armour, have been discovered by American troops during raids.

The guns were part of a shipment of 800 rifles that the Austrian company, Steyr-Mannlicher, exported legally to Iran last year.

The sale was condemned in Washington and London because officials were worried that the weapons would be used by insurgents against British and American troops.

Within 45 days of the first HS50 Steyr Mannlicher rifles arriving in Iran, an American officer in an armoured vehicle was shot dead by an Iraqi insurgent using the weapon.

Over the last six months American forces have found small caches of the £10,000 rifles but in the last 24 hours a raid in Baghdad brought the total to more than 100, US defence sources reported.

The find is the latest in a series of discoveries that indicate that Teheran is providing support to Iraq’s Shia insurgents.

Mahmoud Ahmadinejad, the Iranian president, yesterday denied that Iran had supplied weapons to Iraqi insurgents. But on Sunday US officials in Baghdad displayed a range of weapons they claimed had originated in Iran.

They said 170 American and British soldiers had been killed by such weapons.

Steyr Mannlicher went ahead with this sale, despite the decades-old Iranian Arms embargo. That decision really deserves to impact their sales in the US.

Strategy Page on Steyr’s rifle sale to Iran.