Daily Mirror editor Piers Morgan has been sacked after the newspaper conceded photos of British soldiers abusing an Iraqi were fake.
The Mirror board said Morgan would be stepping down immediately
In a statement the Mirror said it had fallen victim to a "calculated and malicious hoax" and that it would be "inappropriate" for Morgan to continue.
The Queen's Lancashire Regiment (QLR) said the Mirror had endangered British troops by running the pictures.
Roger Goodman, of the QLR, said the regiment now felt "vindicated".
Mr Goodman added: "It is just a great pity it has taken so long... and that so much damage has been done in the meantime."
At a news conference in Preston on Friday afternoon, the regiment demonstrated to reporters aspects of uniform and equipment which it said proved the photographs were fake.
The regiment's Brigadier Geoff Sheldon said the vehicle featured in the photographs had been located in a Territorial Army base in Lancashire and had never been in Iraq.
He said the QLR's reputation had been damaged by the Mirror and asked the newspaper to apologise because the evidence they were staged was "overwhelming".
The Conservatives said they hoped lessons had been learned from the row.
Deputy leader and foreign affairs spokesman, Michael Ancram, said: ''Looking at the facts objectively, this is the right thing for Piers Morgan to have done.
"The photos that were published in the Daily Mirror have done great damage to the reputation of our troops, who are serving under some of the most difficult conditions in Iraq.''
'Recruiting poster for al-Qaeda'
The photos published in the Mirror on 1 May appeared to show British troops torturing an Iraqi detainee.
In one picture a soldier is seen urinating on a hooded man while in another the hooded man is being hit with a rifle in the groin.
Colonel Black, a former regiment commander of the QLR, said the pictures put lives in danger and acted as a "recruiting poster" for al-Qaeda.
However one of the Mirror's informants - Soldier C - said there had been abuse in Iraq.
The Territorial Army solider has been questioned by Royal Military Police after talking about his claims to the Daily Mirror.
On ITV's Tonight With Trevor McDonald he said: "It did go on, it wasn't all the army, it wasn't systematic but it did happen."
Downing Street refused to comment on the issue, saying it was a matter for the Mirror board.
The BBC's Nicholas Witchell said it appeared Piers Morgan remained unrepentant right to the end
"According to one report Mr Morgan refused the demand to apologise, was sacked and immediately escorted from the building," he said.
Morgan will be replaced on a temporary basis by his deputy, Des Kelly.
The newspaper released a statement saying: "The Daily Mirror published in good faith photographs which it absolutely believed were genuine images of British soldiers abusing an Iraqi prisoner.
"However there is now sufficient evidence to suggest that these pictures are fakes and that the Daily Mirror has been the subject of a calculated and malicious hoax.
"The Daily Mirror therefore apologises unreservedly for publishing the pictures
and deeply regrets the reputational damage done to the QLR and the Army in
"The paper will continue to cooperate fully with the investigation.
"The board of Trinity Mirror has decided that it would be inappropriate for Piers Morgan to continue in his role as editor of the Daily Mirror and he will therefore be stepping down with immediate effect."
The Sun newspaper had offered a £50,000 reward for "information about the fake Mirror photos" but withdrew the offer following the sacking of Morgan.