Ahmad Jabbar Kareem Ali, 15, drowned in the Shatt Al Basra canal in May 2003 after he was detained by British troops on suspicion of looting.
The youngster had been taken to the waterway with three other suspected looters where they were given a “soaking”, but Ahmad was unable to swim.
A former High Court judge leading an independent inquiry into the deaths of several Iraqi citizens said it was “a clumsy, ill-directed and bullying piece of conduct, engaged in without consideration of the risk of harm to which it could give rise”.
The report said the soldiers’ “manifest failure” to help was the “plain and certain” cause of the boy’s death.
Ahmad was arrested near the Basra General Hospital on May 8 2003 as British troops battled to bring law and order to the southern Iraqi city.
The report found the teenager was “aggressively manhandled and assaulted” before being driven five miles in an armoured vehicle to the canal.
The report said: “His death ensued because he was forced by the soldiers to enter the canal, where, in the presence of the soldiers, he was seen to be in difficulty, and to go under the water.
“Notwithstanding the unlawful treatment involved in getting him into the water, his death could have been avoided because he could and should have been rescued after it became clear that he was floundering.”
The soldiers were tried in a British court for manslaughter and acquitted in 2006.
The report described how, following the toppling of Saddam Hussein in April 2003, the southern Iraqi city had descended into a “state of chaos”.
The police force was ineffectual and in the absence of a court system, looters could not be dealt with.
The report said the soldiers’ actions gave rise to “grave concerns” about their ability to cope with their orders and the adequacy of the resources available to them.
It also highlighted serious concerns over the soldiers’ training and ability for troops in Basra to “act as both policemen and combatants simultaneously”.
An MoD spokesman said: “This was a grave incident for which we are extremely sorry. We are committed to investigating allegations of wrongdoing by UK forces and will use Sir George’s findings to learn lessons to help ensure nothing like this happens again.”
The Iraq Fatality Investigations (IFIs) were set up in 2013, with the first three chaired by Sir George Newman.
The IFIs provide an inquisitorial investigation akin to a coroner’s inquest in order to meet investigative requirements under the European Convention on Human Rights.