The Ministry of Defence has said it may have destroyed a report on the last sighting of three missing Israeli soldiers which could scupper finding their whereabouts.

It is the latest in a series of setbacks in investigations by Manchester lawyers representing the mother of missing soldier Zachary Baumel, who has not been seen since capture in Syria in 1982.

The JC revealed in December that the Foreign Office was covering up documents from the period over diplomatic concerns with Syria. But it has since released a handwritten letter by British military attache Lt Col Adrian Peck, who was in Syria during the 1982 Lebanon War. In it, he writes that he saw an Israeli tank being driven to Damascus with "one body lying on the catwalk of the tank. It might well be that the driver was a prisoner but one could not be certain".

Col Peck also wrote that he had sent a full report to the MoD. But in a letter to lawyers, the defence officials now say they have no records of reports from Col Peck, and they were probably destroyed in a periodic review of information storage.

The MoD admission comes as Israeli MIA organisation Born Free this week released a highly enhanced picture of the captured tank which matches the description given by Col Peck.

It is believed that the body on the tank was one of Israel's three longest missing soldiers, Zvi Baumel, Yehudah Katz or Zvi Feldman. But their families have never been told of their children's fate, in contravention of international law.

Manchester lawyer Daniel Berke described any destruction of documents as "disturbing" because the Israeli and American governments had highlighted to the British the ongoing importance of information about the soldiers.

"The report by Col Peck is potentially important evidence and a line of enquiry at the very least. I find it quite simply worrying that someone has seen fit to throw away evidence of a breach of the Geneva conventions," he said.

A spokesman for the MoD said: "Following a search of our paper and electronic records, the information requested is not held by the Ministry of Defence. This includes any reports from Col Peck; we have no record of any report.

"The MoD policy on record keeping is to periodically review files to decide whether they have ongoing business value or are required for permanent preservation under the Public Records Act. It is not unusual for files of this age to be reviewed and destroyed."