The scathing comments by General Sir Richard Dannatt directly contradict the Prime Minister, who has repeatedly claimed that the invasion of Iraq played no role in galvanising Muslim extremism in Britain and bringing about the 7/7 bombings.

Des Browne, the Defence Secretary, last night ordered Sir Richard to report for a meeting at the ministry this morning where his future will be discussed.

Sir Richard, who took over as the Chief of the General Staff from General Sir Mike Jackson in August, appeared to give no warning to Mr Browne or the senior hierarchy at the Ministry of Defence before making his comments. In an interview Sir Richard said that the continuing presence in Iraq of 7,200 British troops was “exacerbating the security problems” and said they should come home soon.

He added: “We are in a Muslim country and Muslims’ views of foreigners in their country are quite clear. As a foreigner you can be welcomed by being invited in a country but we weren’t invited, certainly by those in Iraq at the time. The military campaign we fought in 2003 effectively kicked the door in.”

He said that whatever consent there may have been at the start, it had now largely turned to intolerance on the part of the Iraqi people.

“I don’t say that the difficulties we are experiencing around the world are caused by our presence in Iraq but undoubtedly our presence in Iraq exacerbates them,” he said.

He made it clear that he thought that the planning for the post-combat phase was “poor, probably based more on optimism than sound planning”. He added: “The original intention was that we put in place a liberal democracy that was an exemplar for the region, was pro-West and might have a beneficial effect on the balance within the Middle East. That was the hope, whether that was a sensible or naive hope, history will judge.”

Although other senior figures in the Army have privately expressed concern about strategy in Iraq and, in particular, the lack of proper planning after the invasion had taken place in March 2003, no one as senior as Sir Richard has made such a personal attack on the Government’s strategy.

If Sir Richard has spoken out without consultation with or the approval of the other Service chiefs, and, in particular, Air Chief Marshal Sir Jock Stirrup, the Chief of the Defence Staff, it will place him in an isolated position and make him vulnerable to demands that he should resign. Traditionally, Service chiefs who oppose government policy would be expected to step down. However, Sir Richard, in his outspoken interview with the Daily Mail, has clearly decided to make a bold stand because of his serious concerns both for the safety of British troops in Iraq and for the deteriorating security situation in the country where sectarian violence has erupted in the past 18 months.

Sir Richard’s stand will also jeopardise Mr Blair’s attempts to secure his legacy, exposing the vulnerability of the Prime Minister over Iraq, where he has repeatedly claimed that the invasion will lead to greater stability and peace in the region.

Just a fortnight ago in his party conference speech, Mr Blair explained why he thought it was important for troops to remain in Iraq to secure the peace.

He said: “If we retreat now, hand Iraq over to al-Qaeda and sectarian death squads and Afghanistan back to al-Qaeda and the Taleban, we won't be safer; we will be committing a craven act of surrender that will put our future security in the deepest peril.”

Sir Richard’s claim that the decision to invade Iraq “may have turned to tolerance and has largely turned to intolerance” directly contradicts this view.

The remarks will also pose a huge problem for Gordon Brown, the Chancellor, who must decide how long to keep British troops in Iraq if he becomes Prime Minister. In a recent interview he criticised the handling of the aftermath of the Iraq war.

This could not have come at a worse time for Mr Blair. He was hoping the week would be dominated by stories of him securing a lasting peace in Ulster — one of the biggest achievements of his period in office. The comments by Sir Richard have exposed the Prime Minister on his weakest flank.

Sir Richard even linked the presence of British troops in Iraq with the growing Islamic extremism taking hold in Britain. He said that failure to support Christian values in Britain was allowing a predatory Islamic vision to take hold. “When I see the Islamist threat in this country I hope it doesn’t make undue progress because there is a moral and spiritual vacuum in this country.”

Sir Richard also condemned the treatment of injured British soldiers who had been forced to share wards with civilians at Selly Oak Hospital in Birmingham. His remarks were particularly surprising since the most senior officials of the MoD’s defence medical services briefed journalists yesterday that wounded troops who had returned from Iraq and Afghanistan were receiving the best possible treatments. But Sir Richard said that it was unacceptable for “our casualties to be in mixed wards with civilians”.

Sir Richard said: “I am going to stand up for what is right for the Army. Honesty is what it is about. The truth will out. We have got to speak the truth.”

Last night Dr Liam Fox, the Shadow Defence Secretary, said that Sir Richard’s comments came at a time when the Prime Minister’s authority was already “badly damaged and ebbing away”. He added:

“It has always been the case that our presence has been a recruiting tool for extremists. We have always known that our presence on the ground will be used by fundamentalists and men of violence to recruit people into their ways.”

Sir Menzies Campbell, the Liberal Democrat leader, said that government policy on Iraq was “collapsing”. He said: “Senior military figures who were always doubtful about action in Iraq and its aftermath are becoming increasingly anxious about our role and the risks involved.”

Major-General Patrick Cordingly, who commanded the Desert Rats during the 1991 Gulf War, said that Sir Richard’s comments were “very brave”.

He added that the Army chief’s opinion was “enormously pragmatic” and may be “welcomed by some soldiers who have served several tours of duty in Iraq”.

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