Osman Karahan the lawyer of a suspected al-Qaeda militant who allegedly ordered Bigley's death, said the ditch is about 50m from an insurgent checkpoint on the road from Nuamiya village in Iraq.
The British Foreign Office said on Saturday that it was investigating the claim.
A foreign office spokesman, said: "We are following up the claims, as we have pursued every possible lead whether or not the information is likely to prove accurate."
Karahan, the lawyer for Loa'i Mohammed Haj Bakr al-Saqa, a suspected al-Qaeda militant, said his client was lead an informal court that sentenced Bigley to death in Iraq in accordance with Islamic sharia law.
He did not say whether al-Saqa actually carried out the killing.
"He took the decision; we have no information on the execution of the sentence. My client has not made an announcement on that."
Bigley, 62, was kidnapped in Baghdad on September 16, 2004 along with two Americans who were subsequently killed.
A video showing the Briton's grisly beheading was released in October, only three weeks after his kidnapping.
Al-Saqa is on trial for the 2003
attacks in Turkey
Turkish prosecutors have called al-Saqa a "high-level al-Qaeda official."
Al-Saqa is on trial for his alleged role in the 2003 bombings of two synagogues, a British bank and the British Consulate-General in Istanbul that killed 58 people.
Karahan also gave reporters a written statement, which al-Saqa apparently gave during his police interrogation, signed by a Turkish prosecutor and police officials.
In the statement, al-Saqa says he was the chief of security and intelligence for insurgents in Falluja and took part in decisions leading to numerous executions.
He said in the statement that he only killed one person personally.
"I chose this person particularly for myself and executed him. When Falluja was under my orders around 150 people were executed"
Loa'i Mohammed Haj Bakr al-Saqa,
Suspected al-Qaeda militant
The statement, dated August 2005, said: "This person was completely an American agent. I chose this person particularly for myself and executed him. When Falluja was under my orders around 150 people were executed."
Karahan is currently charged with aiding and abetting a terrorist organisation.
He has also been ordered off the al-Saqa case by a Turkish judge, for giving money to his clients.
Karahan said on Saturday that he had objected the judge's decision and would be at the next trial session in Istanbul.