The Solicitors Regulation Authority has indicated that it will follow up allegations made in parliament over the conduct of two solicitors firms over the Al-Sweady public inquiry into allegations of abuses by British forces in Iraq.

In a news release on its website dated 12 January - more then three weeks after ministers expressed outrage in parliament - the regulator said it would be 'urgently concluding existing strands of investigation and reviewing the other concerns raised in the ministerial statement'.

It also indicated that it would be probing allegations made in parliament that firms 'were paying agents to go around Iraq to drum up business'.

Speaking in parliament on 17 December after the publication of the Al-Sweady report clearing British forces of murdering detainees, the defence secretary, Michael Fallon, said that the SRA had begun an investigation into the conduct of Public Interest Lawyers and Leigh Day.

He described the allegations as: 'A shameful attempt to use our legal system to attack and falsely impugn our armed forces.'

The SRA's statement says: 'We have noted with concern the findings of the Al-Sweady Inquiry and the issues raised in the ministerial statement by Michael Fallon... which raised concerns about two law firms involved in litigation or the inquiry.'

It said that the regulator was already investigating aspects of this matter although the falsity of the allegations was established only in the findings of the inquiry published on 17 December. 'We will be urgently concluding existing strands of investigation and reviewing the other concerns raised in the ministerial statement.'

The SRA statement also repeated comments by Conservative MP Sir Tony Baldry about how the firms obtained their clients.

Baldry told parliament that: 'There are suggestions that they were paying agents to go around Iraq to drum up business, often not knowing who their clients were. This seems to me to be yet another issue that needs to be properly investigated by the SRA.' It said Baldry's question 'has also been noted and we will review the evidence'.