By Mohammed Abbas and Adrian Croft

BAGHDAD December 30 - British computer programmer Peter Moore was released on Wednesday, two and a half years after being taken hostage by militants in Baghdad, officials said.

"He is alive and in good health," Iraqi government spokesman Ali al-Dabbagh said. Moore was handed to Iraqi authorities and then to the British embassy.

Moore, who was working on contract in Baghdad, was captured with four of his bodyguards from Iraq's Finance Ministry in 2007 at the height of sectarian bloodshed that killed tens of thousands after the 2003 U.S.-led invasion.

The bodies of three of the bodyguards have since been handed to British authorities. The fate of the fourth, Alan McMenemy, is unconfirmed. British officials believe he is dead.

Foreign Secretary David Miliband called on the hostage takers to "return Alan's body as soon as possible".

It has been one of the longest hostage crises involving Britons since several were held captive in Lebanon in the 1980s.

Moore's stepmother Pauline Sweeney said Moore had told her he did not know why his captors had released him. "He said when they came in to him this morning he thought he was going out to a bullet in his head," she told the BBC.

BRITAIN DENIES CONCESSIONS

British officials have in the past said they believed a Shi'ite militant group called Asaib al-Haq, or Leagues of Righteousness, may have been behind the kidnapping.

Dabbagh said Iraq had not been involved in talks to secure Moore's release, but said that a suspected militant, Qais al-Khazali, who is believed to be a senior Asaib al-Haq member, had been transferred on Wednesday from U.S. custody in Iraq to Iraqi authorities.

"Qais al-Khazali and other suspects formerly in U.S. custody have been handed over to the Iraqi government. Any suspects without evidence for a prosecution will be released," he said.

Khazali's brother was released from U.S. then Iraqi custody in June. The Iraqi government denied any connection with the British hostage issue, saying that the prisoner release was part of reconciliation efforts after years of bloodshed in Iraq.

Miliband said there had been "no substantive concessions" to the hostage-takers and that it was the Iraqi government's steps towards national reconciliation that had laid the foundations for progress in the case.

He declined to comment when asked if British officials had talked directly to the hostage-takers.

Britain's Foreign Office has faced criticism over its handling of the case and its attempts early on to discourage media reporting of the kidnappings.

British Prime Minister Gordon Brown, who spoke to Moore by telephone, said he was hugely relieved to know he would be reunited with his family.

"They have faced a terrible ordeal, and I know that the whole nation will share their joy that he is coming home," he said in a statement.

Moore's father Graeme, 60, who has said he felt the Foreign Office had been "obstructive" in the effort to secure his son's release, said he was "over the moon" on Wednesday.

"When I heard the news I about went through the roof with joy," he was quoted as saying on the website of the Leicester Mercury newspaper. "It's been such a long haul."

"I know that there have been one or two people working in the background to get Peter released," he said.

After the Britons were seized, several videos of Moore in captivity emerged. In one video, aired in February 2008 by Dubai-based Al Arabiya television, Moore called on Brown to release nine Iraqis in return for the hostages' freedom. (Additional reporting by Stefano Ambrogi and Adrian Croft in London, Suadad al-Salhy in Baghdad; editing by Robin Pomeroy)