Colonel Jorge Mendonca, who was awarded the Distinguished Service Order for his actions in Iraq, is being investigated over the death of Baha Mousa, an Iraqi hotel clerk allegedly beaten to death in 2003, the Mail on Sunday reported.
Mendonca, 41, was the commanding officer in charge of the Queen's Lancashire Regiment, the army unit linked with Mousa's death in British custody in Basra, southern Iraq.
An army investigation into the death had centred on ordinary soldiers from the regiment, but was then expanded to senior officers amid allegations the entire chain of command was complicit in the abuse, the paper said.
Earlier this month, following a 10-month inquiry, military police investigators handed their files on the death of Mousa to the Army Prosecuting Authority, who must now decide whether to court martial Mendonca or others.
If he is charged, it would be the first time since the 1950s that a British commanding officer has been implicated in alleged criminal misconduct, the newspaper said.
Rejecting the allegations
Mendonca completely rejects the allegations, and was furious at the investigation, it added.
British soldiers have mainly been
stationed in the south of Iraq
In February, two British soldiers were found guilty of abusing Iraqi civilians at a base in Basra, known as Camp Breadbasket, while a third pleaded guilty.
The mistreatment - including one Iraqi being suspended from a forklift truck and others forced to simulate sex acts - was captured in photographs that were published around the world after they were released as evidence.