The flight crew were temporarily blinded by the explosions
The full truth about the destruction of an RAF Hercules aircraft was covered up by the Ministry of Defence to deny Iraqi insurgents a propaganda victory.
The MoD said the C-130J was involved in an "incident" on landing and there was no evidence of hostile action.
But the £30m plane was struck by bombs planted by militants next to a temporary runway in Maysan province, south-eastern Iraq on 12 February 2007.
The disclosure comes in a formal Board of Inquiry report.
The 58 passengers and six crew on board all escaped, but the plane was so badly damaged commanders decided they could not secure the area long enough to recover it and blew it up to stop it falling into enemy hands.
The incident followed the destruction of a British Hercules in Iraq in January 2005 when it was shot down near Baghdad, killing all 10 servicemen on board.
It crashed after being hit by ground fire which caused an explosion in the right wing fuel tank.
The report makes it clear that planted improvised explosive devices were suspected within an hour of the blasts last year.
But defence officials decided to cover up the full truth about the second incident to deny opponents of coalition operations a high-profile propaganda coup.
The report, published on the MoD website, hails their "sound and well-reasoned approach" to releasing information about the incident and the subsequent aircraft destruction.
It notes this resulted in "minimal media interest" and "denied the enemy the opportunity to exploit the situation for the benefit of their IO (information operations) campaign".
A spokesman for the MoD said: "It is our duty to protect the security of troops on operations.
"At times this means we may need to restrict the flow of information for a period of time to protect that security. We would not deliberately mislead the public."
He added: "The Board of Inquiry commended the crew on its rapid handling of the immediate aftermath of the explosion, ensuring that all on board the aircraft quickly appreciated the gravity of the situation which led to the rapid and safe evacuation of all the crew and passengers from the aircraft.
"We are working on the implementation of the recommendations from the Board of Inquiry and a number have been implemented already."
According to the report, soldiers swept the runway for bombs before the night landing but as the Hercules prepared to touch down "the crew experienced a loud bang and a bright flash ... followed a second later by another flash and a louder bang".
The flight crew were "temporarily blinded" by the flashes and the wing close to the tanks was set on fire before the Hercules veered off the runway and its crew were evacuated.
Contact was made with a second Hercules and soldiers cleared the runway so it could land. According to the report, they "had just enough time to take cover as the wing of the second C130 passed over their heads."
It suffered some damage from debris but rescued everyone on the ground and took off again.
The board's recommendations include minimising the "pattern setting" which helped insurgents predict when the plane would land.