The use of "conditioning" techniques such as hooding and stress positioning was exposed by the abuse and torture of Baha Mousa, an Iraqi hotel receptionist.
Mousa was killed five years ago in Basra, while nine other Iraqi civilians were allegedly tortured.
Mousa's post-mortem showed that he suffered 93 injuries and died of asphyxia caused by a stress position that soldiers forced him to maintain.
James Denselow, an Iraq security analyst, told Al Jazeera that the implications of the report were extremely damaging for the British army.
"I think that the British army has been very proud to date of its level of professionalism and transparency in Iraq," he said.
But "it seems like the story is a lot deeper than we first thought and of course now it involves investigations and the question of possibly lying senior ministers and senior military figures to this investigation".
Donald Payne, a British soldier, pleaded guilty last year to inhumane treatment at a court martial, and earlier this month, the UK's ministry of defence agreed to pay nearly $6m in compensation to Mousa's family and other Iraqis beaten and tortured by troops in 2003.
Dismore said: "We have yet to receive an explanation from the ministry of defence for the discrepancies in evidence given to the committee by Mr Ingram in 2004 and Lieutenant-General Brims in 2006 on the use of these illegal conditioning techniques."
Des Browne, the defence secretary, said there would be a public inquiry into Mousa's death examining the issue raised by the committee.
"We acknowledge that in 2003, some of the conditioning techniques were used on a small number of detainees.
"This should not have happened and we need to know how it came about. That is why I endorse the terms of the inquiry wholeheartedly," Browne said.
Meanwhile, Browne believes there has been "considerable improvements" since 2003 in the training of soldiers concerning the treatment of detainees.