RAF plane was hit by ground to air fire.
He said an RAF Board of Inquiry had found that was the most likely cause of the biggest single loss of British forces in one incident in Iraq.
Mr Reid said the board's findings showed three factors had contributed to the crash - which was not survivable - on January 30 just north of Baghdad Low-level daylight flying made the aircraft more vulnerable to ground-to-air fire. nThe lack of a fuel tank safety system in the wing which had been hit, allowing an explosive mixture of fuel and air to occur.
nInformation about ground-to-air fire was not "robust" enough.
The aircraft reported a fire six minutes after take-off and 25 minutes later was posted missing. A US helicopter formation found the wreckage 20 minutes later.
Mr Reid said that low-level daylight flying was now being avoided, although it had not been banned.
It was being reviewed with "urgency" whether a fuel tank inerting system could be installed and procedure relating to intelligence about ground-to-air fire had been improved.
He said the exact nature of the weapon which brought down the Hercules was not being disclosed for operational reasons.
Documents recovered from the main crash site prove the crew had the most up-to-date information available when they took off, but the intelligence picture changed while they were airborne