Word spread among the populace that UK troops had introduced strange man-eating, bear-like beasts into the area to sow panic.
But several of the creatures, caught and killed by local farmers, have been identified by experts as honey badgers.
The rumours spread because the animals had appeared near the British base at Basra airport.
UK military spokesman Major Mike Shearer said: "We can categorically state that we have not released man-eating badgers into the area.
| It is the size of a dog but his head is like a monkey Housewife Suad Hassan |
"We have been told these are indigenous nocturnal carnivores that don't attack humans unless cornered."
The director of Basra's veterinary hospital, Mushtaq Abdul-Mahdi, has inspected several of the animals' corpses.
He told the AFP news agency: "These appeared before the fall of the regime in 1986. They are known locally as Al-Girta.
"Talk that this animal was brought by the British forces is incorrect and unscientific."
| THE HONEY BADGER Also known as a ratel, it is a large, sharp-clawed mammal At around 100cm (39in) long it is slightly bigger than its British woodland cousin Capable of taking on a cobra, the animal weighs up to 14kg (30lb) Its Latin name is melivora capensis, and it is indigenous to Africa and the Middle East |
Dr Ghazi Yaqub Azzam, deputy dean of Basra's veterinary college, speculated that the badgers were being driven towards the city because of flooding in marshland north of Basra.
But the assurances did little to convince some members of the public.
One housewife, Suad Hassan, 30, claimed she had been attacked by one of the badgers as she slept.
"My husband hurried to shoot it but it was as swift as a deer," she said. "It is the size of a dog but his head is like a monkey," she told AFP.