The BBC Governors' Programme Complaints Committee upheld objections from the soldiers' families and members of the public who fought a campaign to stop the BBC broadcasting the footage, which the corporation refused.
The images of the men, who were killed in the early days of the war, were shown in the BBC Two programme 'Correspondent: Al Jazeera Exclusive', Sunday June 1 2003. The documentary was looking at how the Arabic television station Al Jazeera covered the war in Iraq.
The committee upheld complaints concerning the use of footage showing two dead British servicemen, Sapper Luke Allsopp and Staff Sargeant Simon Cullingworth.
Senior BBC managers involved in the decision to broadcast the footage argued that they believed it was in the public interest to use the footage, given the actions the BBC took to mask the images to reduce the distress caused, in the light of direct communication with relatives of Allsopp and Cullingworth.
Despite this, the committee decided to uphold the complaints on the final grounds raised by the complainants. It took the view that the public interest argument had not been sufficiently compelling.
However, it said that its decision should not be taken to create a precedent in relation to the use of distressing footage in future programmes, which should be judged on a case-by-case basis.
The BBC's editorial guidelines on revisiting past events require programmes to balance the objections of families in such situations against the public interest.
The committee's findings are not usually made public, but given the press interest in the findings and to help provide closure for the families, the BBC decided to make the findings public, having already spoken with soldiers' families.
The decision to show the image re-ignited the debate about showing controversial images, which raged during the fighting in Iraq.
In one incident, a mother recognised her wounded son on BBC News before the government was able to inform her he had been injured.
Royal Marine Commando Glen McCoy was seen burning on TV after a raid on Iraqi positions around the town of Faw. He had been shot and hit by an exploding gas canister and was seen running in flames from a building.
The news footage was seen at home in the UK by his mother Diane McCoy.
Prior to that, there had been controversy surrounding broadcasts by Arab satellite network Al Jazeera, which provided the BBC with the images of the two dead soldiers.
The decision to use the footage was justified by BBC's deputy director of news Mark Damazer, who said using the footage allowed viewers to see the full visual evidence of why Al Jazeera's coverage had provoked outrage. He said that to leave the footage out would undermine the credibility of the programme.
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