We should not have gone to Iraq because going to Iraq implied staying and staying implied leaving. Now begins the leaving, and it will be bloody. All else is an illusion.

This weekend another Iraqi government, the third in three years, entered office under American guns in Baghdad’s green zone. Ibrahim al-Jaafari gives way to Nouri al-Maliki, though neither the defence nor internal security posts are filled. These are posts that matter, with their murky unofficial links to police, militias and Baghdad death squads.

The reason they are unfilled is that post-withdrawal Iraq is already up and running. Power has seeped away from the coalition and its still puppet ministers. It has moved out onto the streets of Baghdad and Basra — and into the morgues.

The jungle drums can read the signs. The British are back in helmets and tanks in the south, the Americans are back bombing and strafing villages in the west. The coalition has lost any ability to guarantee security to the Iraqi people, who must look elsewhere. In Iraq, optimism may always be a virtue but it has become fantasy.

This place is a failed state. There is no rule of law. Murder is unpunished. No foreigner dares to move except by air. Any Iraqi risks his life working away from home — and women risk their lives working at all. Interpreters wear balaclavas. Vendetta killings come not daily but hourly, measured only by body counts. Professionals are decamping to Jordan in greater numbers even than under Saddam. Water, power and petrol supplies are also worse.

At the end of this month Tony Blair flies to Washington to discuss with George W Bush how to escape. What was to be a neocon beacon of democratic stability has become a hell-hole of anarchy. Iraq is no longer just a mistake: it is the outcome of an intellectual and moral catastrophe from which the image of western democracy will take a generation to recover.

Bush and Blair have been shielded from this truth by years of sycophantic briefing, but they cannot be shielded from opinion polls. The war is overwhelmingly unpopular on both sides of the Atlantic. Since both leaders are planning their departures, they are frantic to have the incubus removed from their shoulders. Iraq policy is a matter of dates.

The best moment to withdraw was when the Pentagon originally intended, in June 2003, leaving Ahmed Chalabi to fight things out with the Shi’ite clerics after Saddam’s downfall. But the urge to “rebuild a nation” got the better of Bush and Blair. Another window was in December 2003, then June 2004, then December 2005, “drop dead” dates when control might have been handed over to whichever majority leader was ascendant. Another date is now, with a new government in place.

A crucial illusion of American and British policy is that the occupation is somehow maintaining the integrity of the state and its government. It is not. It is undermining both. In truth there is no state and coalition troops are merely squatting in camps dotted across the landscape, emerging occasionally to kill or get killed.

There are two consequences of each refusal to leave. First, the troops offer an ever more inviting target for insurgency and a magnet for anti-western guerrillas from across the region. This in turn boosts the militias as alternative power networks and encourages politicians to back them rather than the army. Second, each postponement of withdrawal undermines the independence and self-reliance of the current Iraqi leader. The American failure to entrench Ayad Allawi as a new Baghdad strongman last year and leave him to fend for himself was not democracy but stupidity.

Miliki’s position even within the Shi’ite majority depends on his appeasing the Mahdist gangs and the Iran-backed Badr Brigades linked to Ayatollah al-Sistani. The one certainty is that the presence of American power at his elbow will weaken, not strengthen, his credibility as a nationalist leader.

Washington and London still do not hear the message, that their occupation is hugely unpopular among Iraqis, except for those VIPs whose lives literally depend on it.

Withdrawal becomes harder with each postponement. Those with a vested interest in occupation are more entrenched. Bases are enlarged, contracts let, corruption extended. For the past year British and American policy has been rooted in the concept of “orderly transition” to a new Iraqi army, the latest version of Vietnamisation. Over the course of 2005-06 American and British troops were to be replaced by new army and police units. Last October the mooted date for this was May 2006. Such dates are meaningless when an occupier has lost initiative to anarchy.

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