Erik Prince, the founder of the controversial US private security firm Blackwater, has said he will remain the company's chairman after announcing he was stepping down as chief executive officer.

His resignation as CEO on Monday comes as five former Blackwater guards await trial in the US in connection with the killings of 17 Iraqis in a shooting incident in Baghdad, the Iraqi capital, in 2007.

The guards are alleged to have opened fire on civilians in Nisoor Square in an unprovoked attack that provoked a wave of outrage in the country.

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