LONDON (Reuters) - Washington's closest Iraq war ally Britain said Monday it would play no part in any trial of Saddam Hussein that might lead to his execution.

But London -- which abolished capital punishment 40 years ago -- also made clear it would reluctantly accept death for the captured ex-dictator if that was what an Iraqi tribunal ruled.

"The United Kingdom is against the death penalty," Britain's senior envoy to Iraq Jeremy Greenstock said.

"So we would have no part of a tribunal or a process that had the death penalty as one of its penalties."

To the consternation of rights groups, Iraq's captured ex-dictator might face execution under a special court set up by the Iraqi Governing Council days before Saddam's capture. The United States, which is holding Saddam, allows execution.

Besides the moral issue, some fear executing Saddam would make him a martyr in parts of the Arab world.

Foreign Minister Jack Straw told reporters in London it was "very likely" Iraqis would want to try Saddam themselves.

"Domestic tribunals...should wherever possible try war criminals -- and only where that is not available or not appropriate does one make use of international courts," he said.

Prime Minister Tony Blair said he had confidence in Iraqi justice. "Of course we must make sure that there is a proper and independent and fair process. But I am quite sure that the Iraqis have the capability of doing that," he told parliament.

A spokesman for Blair said London would be forced to accept Saddam's execution if it came to that.

"Were that to be the outcome, that would be something we'd have to accept," he said.

TOASTED WITH TEA

London would understand Iraqis' motives after so much suffering under Saddam, even if it disagreed with execution in principle, Greenstock added.

"Given what he's done, in Iraqi eyes, there would be a justification to that even if we ourselves are against the death penalty. So let him be tried within his own culture," he said.

While Blair's government is delighted at Saddam's capture, it knows that unless weapons of mass destruction are found, its reputation will remain tarnished among Britons who largely feel London exaggerated Baghdad's threat to justify war.

Greenstock said it was not necessary "to rake over that old ground" but hoped Saddam himself may unlock a few clues.

"I don't accept the premise that he didn't have weapons of mass destruction. I think in due course the story will be told. Maybe he'll tell us some of it himself," he told BBC radio.

Straw, however, was less optimistic.

"Frankly I'm not holding my breath for any confessional statement from Saddam Hussein," Straw said. "He wouldn't understand the truth if he fell over it."

In line with Blair's understated tone Sunday, Straw dryly revealed he was dreaming about the European Union when woken with news of the capture -- and celebrated British-style.

"I was very pleased, not to say delighted, to have good news and for it to be on a non-EU subject," he said. "I didn't leap for joy. I got out of bed to make a cup of tea."

With two car bombings in Iraq Monday reminding the world that Saddam's capture would not bring a quick end to violence, Britain warned it may well get worse in the short term.

"As we have seen yet again today, the terrorists and Saddam sympathizers will continue. And though small in number and in support, their terrorist tactics will still require vigilance, dedication and determination," Blair said.