BAGHDAD, Iraq - January 29, 2009 - The Iraqi government has informed the U.S. Embassy in Baghdad that it will not issue a new operating license to Blackwater Worldwide, the embassy's primary security company, which has come under scrutiny for using excessive force while protecting American diplomats, Iraqi and U.S. officials said Wednesday.

Iraq's Interior Ministry conveyed its decision to U.S. officials in Baghdad on Friday, in one of the boldest moves the government has made since the January 1 implementation of a security agreement with the United States that sharply curbed American power in Iraq. Blackwater employees who have not been accused of improper conduct will be allowed to continue working as private security contractors in Iraq if they switch employers, Iraqi officials said Wednesday.

"When the work of this committee ends," Interior Ministry spokesman Major General Abdul-Karim Khalaf said, private security companies "will be under the authority of the Iraqi government, and those companies that don't have licenses, such as Blackwater, should leave Iraq immediately."