Iraq sees "security vacuum" without Blackwater

By Dominic Evans and Paul Tait

BAGHDAD (Reuters) - Iraq will not rush to expel U.S. firm Blackwater, under investigation over a shooting which killed 11 Iraqis, because it would leave a "security vacuum" in Baghdad, a government official said on Sunday.

The shooting in western Baghdad last Sunday incensed Iraqis and Prime Minister Nuri al-Maliki vowed to freeze the work of Blackwater, which employs about 1,000 people and guards the U.S. embassy in Baghdad. But five days later it was back at work.

Instead, the Iraqi government and U.S. officials have agreed to set up a joint inquiry into the work of private security companies like U.S.-based Blackwater, which many Iraqis see as private armies acting with impunity.

A senior Iraqi police source close to the investigation said the Interior Ministry and special forces police were examining a videotape of victims taken in the aftermath of the shooting.

U.S. Secretary of State Condoleezza Rice has said she had ordered a full "review of how we are conducting our security details" but added that dangerous diplomatic missions in Iraq had to go on because they were critical to U.S. goals there.

In what appeared to be a further softening of Iraq's response to the shooting, a government spokesman for Baghdad security said Blackwater and other private security companies were doing important work guarding foreign diplomats.

"If we drive out or expel this company immediately there will be a security vacuum that will demand pulling some troops that work in the field so that we can protect these institutes," spokesman Tahseen al-Sheikhly told a news conference.

"This will create a security imbalance," he said, speaking through an interpreter.