Declining to comment on why two armed British nationals disguised as Iraqis would be in Basra, the Ministry of Defence told Aljazeera.net it didn't matter if both men were out of uniform with no identification.
"Iraqi law requires any coalition force members to be handed back - once it was established they were foreign soldiers, they should have been handed over.
"There was even an order from the Iraqi Ministry of the Interior that both men should have been released," the spokesman added.
Asked whether the raid suggested that using force in Iraq to achieve an objective was acceptable, the defence official said the "vast majority of Iraqis in Basra are law-abiding".
Two British military vehicles were
torched in Basra on Monday
"We were dealing with a small group of between 200 and 300 people. Naturally, the brigadier [John Lorimer] fully considered the consequences of what he was doing."
Lorimer, the UK's top military official in Basra, said in a media statement that "his concern for the arrested men increased after he received information they had been handed over to militia elements".
And a second defence official said that although the raid - which appears to have devastated the police station - had been unsuccessful, it allowed troops to obtain accurate intelligence as to where the two men would be found.
"Unfortunately they weren't released and we became concerned for their safety. As a result a Warrior infantry fighting vehicle broke down the perimeter wall in one place.
"Our guys went in there and searched it from top to bottom in order to go and recover our two soldiers who had been detained," he said.
Both British agents were rescued
from a house in Basra
The two undercover agents were later rescued from a house in Basra. The operation followed a shooting incident and riots in which two British armoured vehicles were torched as their crews fled for safety in the southern Iraqi city of Basra.
British Defence Secretary John Reid said the soldiers seen emerging from a burning tank under mob attack suffered only minor injuries - despite violent scenes that stunned British newspapers.
No Iraqi Foreign Ministry spokesman contacted by Aljazeera.net was prepared to comment on the prison raid.
But an Iraqi member of parliament, Ali Dabagh, said the Shia militiamen from the Mahdi Army had attempted to take the British soldiers hostage to exchange them for two militia leaders arrested on Sunday by British forces.
London-based independent defence analyst Paul Beaver said the problem appeared to have been caused by a British intelligence operation to infiltrate insurgent forces going wrong.