After the first Gulf War they vowed it would never happen again. It has. Why?

After "friendly fire" accounted for a fifth of British casualties in the first Gulf War, military commanders and politicians vowed it should not be allowed to happen again.

Yet five British soldiers and airmen have already been killed by their own side in this conflict. The chairman of an influential Commons committee says billions of pounds which should have been spent on crucial systems to prevent such "blue on blue" incidents went instead into developing weapons such as the Storm Shadow missile, used for the first time just over a week ago.

"I will press for an inquiry into 'blue on blue' incidents as soon as this war is over," said Edward Leigh, chairman of the Public Accounts Committee (PAC). "I will be amazed if we do not have one."

In 1992 a predecessor to the PAC concluded the Ministry of Defence should "redouble its effort to secure an agreed approach" to prevent friendly fire deaths. But a decade later the department had got only as far as approving a policy paper on combat identification. Many of the solutions needed to implement those policies are several years away from fruition. According to Mr Leigh, the MoD has shown neither the commitment nor put in the investment to prevent them. The ministry, for its part, blames foot-dragging in Nato.

Two British airmen died when their Tornado was brought down by a Patriot missile, and two soldiers in a Challenger tank were killed by fire from another Challenger. But the "friendly fire" death that caused particular outrage was that of Lance Corporal of Horse Matty Hull, of the Blues and Royals Household Cavalry, who was killed when his Scimitar armoured vehicle was attacked by an American A-10 tank-killer aircraft.

Soldiers on the scene accused the A-10 pilot of being reckless and, on a day when visibility was excellent, ignoring signs that should have told him the Scimitars were Allied vehicles. His heat-detecting sight should have given him further information warning him off the target, they added.

But all American vehicles in Iraq have a transponder which gives an electronic signal to US forces. British forces rely purely on visual indications, including chevrons, Union flags and bright orange panels. On the question of why British tanks, armoured vehicles and trucks have no electronic IFF (Identification Friend or Foe) equipment, everyone points the finger of blame at someone else.

The MoD is adamant that no effort has been spared to try and get electronic systems on stream, but says three years of talks in Nato failed to produce agreement on which system should be adopted. It claims security considerations have also prevented international agreement on a uniform, "interoperable" system.

Aircraft have long had equipment to recognise each other electronically. The US is ahead on developing systems that alert aircraft to its own vehicles and troops on the ground. But an MoD source insisted: "There just is not anywhere out there a system on the shelf. If there was, we would throw money at it, but there is not."

A "combat identification" solution for land forces, though identified as necessary in 1992, will not start to enter service until 2006. The Battle Target Identification programme would protect British troops on the ground from friendly fire by British aircraft – but would only protect them in joint operations if the equipment was compatible with allies' systems.

The problem has become more complicated than it was at the time of the first Gulf War. The nature of operations has changed, battlefields are not so clearly defined, and there are many more joint operation. Targeting is different: it is now geared more closely to the protection of civilians and the buildings and resources that sustain them.

The PAC will continue to urge the Government to do more to develop systems compatible with those of its allies, says Mr Leigh. It suggests a framework by which it should reach agreements with Nato and non-Nato allies.

"The solutions are not easy," he said. "But they are not impossible. It is definitely a question of priorities. The question that needs putting is whether they can give the same level of funding to this that they do to developing the weapons and missiles."

In the end, an MoD official admitted, "there is no failsafe."