The Ministry of Defence said last night it was investigating the circumstances of the crash but said it is not thought to have come under attack by the Taleban.
The crash, which happened near Kandahar air base, represents the third single biggest loss of life of British troops in Afghanistan since the conflict began.
Local police spokesman Zia Durrani said the aircraft went down in the Takhta Pul district, around 30 miles from the Pakistan border.
The Taleban immediately claimed responsibility. A spokesman for the group, Qari Yousaf, told Channel 4 News the helicopter was on a routine military exercise when its fighters hit it. But experts have cast doubt on the claim, saying mechanical failure was a more likely cause.
Last night a spokesman for governor of Kandahar province, Tooryalai Wesa, blamed the accident on “technical problems”.
Defence analyst Paul Beaver said: “It is difficult to speculate on what has happened, but it sounds like this was a flying accident instead of a case of the aircraft being shot down.
“It could be weather related, it could be dust or it could have been trying to avoid birds, for example, or it could be some kind of mechanical failure.”
Beaver said that a board of inquiry would have been set up immediately by the Military Aviation Authority to establish the reasons for the crash.
The MoD said it could not release more details until the families of the deceased had been notified.
The International Security Assistance Force also said it was still examining how the crash happened.
It added: “Our thoughts and prayers go out to the family and friends affected by this tragic event.”
Beaver, a specialist adviser to the House of Commons Defence Committee, said it was likely the crash involved a Lynx Mk9 helicopter which he said has an “exceptional record”.
He also said it was likely the weather would now become a key factor in the investigation if “enemy action is not
The area it was operating in had “challenging” terrain and was “fairly mountainous”, he added.
The Lynx model was first deployed by the UK in the late 1970s.
It is a multi-purpose battlefield helicopter with twin-engines, meaning it could continue flying even if one failed.
Lynx are light utility aircraft used for a wide range of operational capabilities, including transport and resupply.
They usually carry a crew of three, including a pilot, co-
pilot and gunner.
It is thought that the other two personnel on board could have been travelling as passengers.
In May 2006, a Lynx aircraft was shot down by insurgents over Basra, Iraq, killing five British service personnel, including Flight Lieutenant Sarah-Jayne Mulvihill, the first female member of the armed forces killed in Iraq.
Nato forces are currently preparing to withdraw combat troops by the end of this year, with responsibility for fighting the Taleban insurgency being handed over to the Afghan army and police.
The MoD said concerned family members can contact its casualty centre on 08457 800 900.