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Peng also believes that members of the unit involved were told by their sergeant that there would be a mass killing and were offered the opportunity to withdraw. He claims: "That members of the involved unit should have been given the option of withdrawing from the killing, prior to the event, strongly supports the conclusion that it was a calculated act."

Peng’s claims are partly based on the testimony of villager Chong Hong, who claims he had a remarkable escape from Scots Guards’ bullets. "The soldiers gestured to us to turn our backs," he said. "We were all standing still, too frightened to move. Then the shooting began and I fell to the ground. I think I fainted from fright."

Inche Jaffar bin Taib, a Special Police Constable stationed at Batang Kali at the time of the killings, and who also acted as a guide for the Scots Guards, told Peng: "The Scots Guards told me not to look at the male detainees. I turned my back towards them and suddenly there was a terrific burst of gunfire. Women and children screamed. I turned around. There were dead bodies everywhere." He said he counted 25 bodies.

In 1970, disquiet over the Batang Kali killings persuaded Labour’s then Defence Minister, Denis Healey, to order an inquiry. A team from Scotland Yard was assembled to travel to Malaya but the inquiry was scuppered when Edward Heath’s Conservatives won the general election of that year and the inquiry was cancelled.

Ian Ward, a former Daily Telegraph war correspondent in south-east Asia who co-wrote the book with Peng, claims the Batang Kali cover-up proved "highly significant".

Ward said: "It set military parameters for operations. Commanders could thereafter remain confident that ‘excesses’ by their troops were unlikely to be exposed to public scrutiny.

"Equally important, Batang Kali undoubtedly sowed terror in the heart of the civilian population, just as it was planned to do."

Veterans of the Malaya Campaign were last night scathing of the claims.

General Sir Michael Gow said: "I served with that battalion, although I arrived a few months after the alleged incident. I would say that these allegations are complete nonsense. Our unit was completely professional and nothing of that sort happened. What some people forget is that we it was a hell of a slog out there. We lost a lot of men, including some good friends."

Major-General Sir John Acland added: "I was not at the incident, but there was a very strong feeling in the battalion that nothing wrong happened."

Other former Scots Guards last night leapt to the defence of the regiment.

Iain Duncan Smith, the former Tory leader and Guardsman, said: "I was too young for Malaya. But the Scots Guards are one of the most professional units in the world. The way the British forces conducted themselves contributed to the success. Modern Malaysia owes a great deal to Britain for dealing with the insurgency."

A spokeswoman for the Ministry of Defence said: "The events of Batang Kali, 1948, have been well-documented and investigated, with the conclusion that there is insufficient evidence to warrant criminal proceedings."

• The Malayan Emergency lasted 12 years, from 1948-1960, and was Britain’s first colonial war after World War II.

Although the Emergency was a war, it was never officially called one out of regard for the London insurance market that the Malayan economy depended upon for cover. Insurance rates covered losses of stocks and equipment through riot and civil disobedience in an "emergency".

Britain gave Malaya independence in August 1957, which removed any justification for an armed insurrection. The Malayan Government finally decided to declare the Emergency over on 31 July 1960.

Chin Peng, the legendary guerilla leader of the Communist Party of Malaya (CPM), was, at one point, the most wanted man in the British Empire with a US$250,000 bounty on his head.

After the Emergency, Peng moved to bases in the dense jungle of southern Thailand where the party fractured, often murderously.

He remained underground until 1989 when he officially disbanded the CPM but was refused permission to return to Malaysia.

His autobiography, My Side of History, has been number one on Malaysia’s bestseller list for the past 10 weeks.