Bahrain said on Monday it would create a judicial panel to review some verdicts a military court issued over anti-government demonstrations mounted last year by the country's Shi'ite Muslim majority and crushed by the Sunni-led kingdom.

A statement carried by the official news agency BNA said the move was a response to recommendations of an inquiry into the turmoil commissioned by the Bahraini government.

Military courts issued at least five death sentences and sentenced some opposition leaders to life terms for organising protests after last year's unrest, among a slew of pro-democracy movements that swept across the Arab world.

The United States, whose Fifth Fleet Bahrain hosts, has said a $53 million (34 million pounds) arms sale to Bahrain depends on its response to the recommendations of the inquiry, which found detainees had been systematically abused and in some cases tortured to death.

Monday's statement said judges from civilian courts in the Gulf island kingdom would be part of a body reviewing verdicts issued by the military tribunal that were not subject to appeal.

Rulings subject to review would include convictions for statements that did not amount to incitement to violence, it said. The inquiry had criticised such convictions as punishing free speech.

The National Safety tribunals, in which Bahrain prosecuted some of the more than 1,000 people detained in the aftermath of the protests that rocked the kingdom in February, did not initially allow appeals.

Bahrain subsequently transferred some cases to civilian courts and allowed them to hear appeals of verdicts handed down by the military tribunals.

Matar Ibrahim Matar, a former MP whose bloc, the largest Shi'ite opposition group, quit parliament to protest the crackdown, said the government was paying lip service to free speech while continuing to punish dissidence.

(Authorities are) still charging people with the same charges described by the report and human rights organisations as incompatible with the right of expression and free speech, he told Reuters.

Separately, BNA said the head of the body charged with implementing the recommendations of the inquiry was continuing to work, apparently responding to a report in the opposition Al Wasat daily that he had resigned.

The inquiry dismissed Bahrain's claim that Shi'ite Iran stoked unrest through its co-religionists, who complain of discrimination in access to land and state employment.

(Writing by Joseph Logan; Editing by Mark Heinrich)