A deal allowed UK troops to withdraw to Basra's airport last summer
The defence secretary has said reports British soldiers delayed helping Iraqi troops in Basra because of a deal with militiamen were "simply not true".
The Times said a secret pact with the Mehdi Army kept British forces on the sidelines for days while an attack was launched on the Shia group in March.
While officials denied the pact, but admitted a previous deal, Des Browne said he never constrained the military.
The Conservatives said the public had not been given the "full picture".
Responding to questions from shadow defence secretary Liam Fox, Mr Browne said: "The allegations made in the Times article are simply not true - there was no deal, never mind a deal preventing the UK military from entering Basra.
He said this had been made clear in a letter to the Times by Air Vice Chief Marshall Chris Nickols.
Questions are being asked about just how far this deal tied British commanders' hands during this year's Battle for Basra
"I have the greatest confidence in the judgement of UK military commanders in Iraq and I would never seek to constrain their ability to make decisions," said Mr Browne.
Hundreds died in the Charge of the Knights - or the Battle for Basra - against the Mehdi Army, which follows radical Shia cleric Moqtada Sadr, until the Iranian-backed militia eventually withdrew.
The offensive - backed by US Marines - was overseen in Basra by Iraqi Prime Minister Nouri Maliki, after he vowed to "re-impose law".
US and Iraqi officers have accused Britain of initially standing back because of a secret deal cut with the militias last year.
The Army has admitted there was a deal last summer to allow their safe retreat from the city.
According to BBC security correspondent Frank Gardner, by the time Britain handed over Basra Palace to the Iraqi Army in September, the deal was done.
Frank Gardner's report on the row over the Battle of Basra
"Britain would release around 60 militia prisoners and stop patrolling inside the city. In return, the Mehdi Army agreed not to attack the British as they withdrew to the airport.
"Lives were saved but Basra was effectively abandoned. Now questions are being asked about just how far this deal tied British commanders' hands during this year's Battle for Basra," said our correspondent.
According to the Times an "accommodation" between Britain and the Shia group kept troops, based at Basra airport, out of the conflict for six days.
Under the deal's terms, it said, no British soldier could enter Basra without the permission of Mr Browne.
In a statement, the Ministry of Defence said the article was "wholly inaccurate" and "wholly misleading".
We negotiate with all sorts of groups; anyone who is willing to engage with the political process and reconciliation to move the thing forward
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.