In a report at the weekend in The Observer newspaper, MoD officials said that the pictures were almost certainly reconstructions, but isolated incidents of real abuse of Iraqi prisoners did take place.
The MoD said that despite knowing the pictures are fake it is unlikely that it will be able to prove when and where they were taken.
"We believe the pictures are reconstructions but can not prove it, and so we are concentrating on whether the allegations are true or not," officials told the paper.
Despite widespread belief in military circles, the Daily Mirror has refused to back down over its claims and has continued to insist the pictures are the real thing. Mirror editor Piers Morgan was still insisting at the weekend that the pictures were genuine.
It is the likely inability of proving the pictures are fake that will see Morgan hang on to his job. He had been under fire for publishing the images and putting the lives of British soldiers based in southern Iraq at risk.
At the weekend, there were reports that Trinity Mirror chief executive Sly Bailey was coming under pressure from American investors about the paper running the pictures.
In an effort to divert attention away from the pictures, Morgan has said that the public is now more interested in whether there is substance in the abuse allegations.
He questioned why it had taken the British Army so long to complete an investigation into reports of prisoner abuse.
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