LONDON — A newspaper in Britain reported yesterday that British soldiers had smuggled stolen guns out of Iraq and exchanged them on the black market for cocaine.

A spokesman for the Defense Ministry said yesterday that soldiers had been investigated for the “unlawful possession” of weapons and that prosecutors would decide whether enough evidence existed to file charges. He would not comment on the report that small arms had been exchanged on the black market for drugs.

According to the Sunday Times, the soldiers transported handguns to Germany from Iraq and exchanged some of them for cocaine with a street value of $4,700. The drugs were then sold to soldiers fighting in Iraq, the Times reported.

The article said soldiers from the 3rd Battalion, Yorkshire Regiment, which has since returned from Iraq, are at the center of the inquiry.

The allegations come at a time of heightened focus on military misconduct, including reports of increasing drug use among troops in Afghanistan and Iraq.

Additionally, a British soldier pleaded guilty last week to “inhumane” treatment of Iraqi civilians in the death of a hotel receptionist who was allegedly beaten in September 2003 at a British military camp in Basra, a city in southern Iraq. Baha Mousa suffered 93 injuries, prosecutors said, including fractured ribs and a broken nose, before he died.

Six other soldiers charged in connection with his death have pleaded not guilty in the continuing court-martial.