Soldiers stationed at a remote Afghan observation post were not aware of the existence of another post where a British soldier was fatally shot, an inquest heard.

Lance Corporal Michael Pritchard, 22, from Eastbourne, East Sussex, was killed by a gunshot wound to the ribcage.

The shot is believed to have been fired from the remote observation post, known as a sangar, by Lance Corporal Malcolm Graham, of the Royal Scots Borderers, 1st Battalion. L/Cpl Graham thought he was shooting at Taliban insurgents, the hearing at Eastbourne Town Hall was told.

L/Cpl Pritchard, who was on secondment with 4th Battalion The Rifles, was deployed to the observation post N30 on December 20, 2009.

He was watching a blind spot on an access road in the Sangin area of Helmand province, ensuring Taliban insurgents did not plant improvised explosive devices (IEDs) in the road, the court was told.

Rifleman Ainsley Nash, spotted a heat source using a viper night sight at 7.45pm which he believed to be a human figure crouching or kneeling in the road, the court heard.

Mr Nash, who was with Rifleman Nathan Bennett and Lance Corporal Craig Knight, assumed the heat source was on the highway when he saw a second heat source moving towards the first, the inquest heard.

He said: "I recall L/Cpl Knight saying he had his eyes on the source and that there were two people in the area of the road.

"He tried to transmit this to the operations room over the radio."

Mr Knight asked Mr Nash to use his personal radio to contact Rifleman Steven Preece in the northern sangar so he could relay the information about the heat sources to the operations room and ask whether they had permission to fire warning shots, the inquest was told.

Mr Preece told them they could not fire warning shots but they could let off mini flares, the court heard.

Mr Nash told the court he fired some illumes at the heat sources, making the assumption that someone was digging in the road to place an IED.

The soldiers let off more illumes and fired three to five rounds from a machine gun, the court heard.

The inquest heard that Mr Graham and Corporal Jonathan Dolton arrived and Mr Graham set up his sniper rifle in the firing position.

The sniper fired warning shots while illume was fired and the next thing Mr Nash heard was "man down" over the radio.

Mr Bennett said "L/Cpl Knight sat down and said he felt sick. The sniper then said: 'Don't tell me we have been shooting at our own blokes.'

"I said we could not have been as there was no-one near the road."

The inquest continues.