An independent panel has strongly criticised the way the US army manages contracts to supply its troops in Iraq and Afghanistan.

The panel said there were high levels of fraud and waste in relation to contracts worth $4 billion (£1.9 billion) a year.

It blamed a lack of oversight and said only about half the army's contracting staff were properly qualified.

Defence Secretary Robert Gates said he was 'dismayed' by the report and the Pentagon would pursue its suggestions.

The army says it is pursuing 83 criminal inquiries related to contract fraud and more than $15 million dollars in bribes have been exposed.

The panel did not address specific allegations against individuals, but made clear that a lack of oversight and too few army contracting personnel had exacerbated systemic problems.