A suicide car bomb exploded outside the police headquarters in Basra today killing three police trainees and wounding seventeen, in the biggest attack there since British forces pulled out of the city centre this month.

The blast raised fears among local people that the British withdrawal from Basra Palace had been premature and that the Iraqi security forces, who are supposed to take the place of British soldiers, are unable to deal with the threat.

A British military spokesman insisted, however, that the Iraqi police and army were able to cope.

“Although we retain overall responsibility for security across the province we remain confident that the Iraqi security forces will be able to manage this situation,” Major Mike Shearer told The Times.

Britain’s 5,500-strong contingent in Iraq is concentrated at Basra airport, several miles outside the city. Soldiers at the base are currently enjoying a visit from Ewan McGregor, the actor.

The suicide bomber approached al-Ashar police station as trainees were taking part in a morning demonstration outside the front, police said. A guard saw him and opened fire but failed to stop the car from detonating.

Police said that three trainees were killed and seventeen wounded. Major Shearer said that only one member of the Iraqi security forces had been killed, along with two civilians, while a number of others were injured.

Major-General Abdul-Jalil Khalaf, the police chief of Basra, blamed al-Qaeda in Iraq for the attack. "We found one of the suicide bomber's legs tied to the steering wheel. It seems that al-Qaeda wants to make use of the fragile situation in the city caused by the tension among the parties and the city's officials," he said. "We cannot say that there is a security vacuum, but the security measures are less strong in the day than the night. After this attack we will increase the police patrols in the day."

Amir el-E’abi, a lawyer who lives in Basra, said that Britain remained responsible for security in Basra despite retreating to the airport. “They are not doing anything now. That means they want to harm this city. They should do something,” the 37-year-old said.

Major Shearer argued that the security situation was improving. “The violence has reduced considerably following our repositioning from Basra Palace three weeks ago,” he said. Car bombings, however, are rare in Basra, the oil-rich Iraqi port city.

Britain has been in charge of security in Basra since the 2003 invasion, with its soldiers patrolling the streets and training thousands of police and troops. Over the past few months, the military has been handing back various outposts in Basra to its Iraqi counterparts, insistent that they are ready to take the lead.

At the start of September about 500 soldiers pulled out of Basra Palace, Britain’s last stronghold in the city centre, and withdrew to join 5,000 other soldiers at the airport base, where they are waiting for a signal to turn the province over to provincial Iraqi control.

This will happen when coalition commanders and the Iraqi Government agree that the Iraqi security forces are up to speed. An announcement could come within weeks.

Suicide bombings are extremely rare in Basra, a majority Shia Arab city which lacks the sectarian divisions that have fuelled the violence in other parts of Iraq, such as Baghdad. But British troops have come under fire from Shia militias, particularly the Mahdi Army, who want them to leave the country.

Officers believe that by replacing the British element with newly trained Iraqi police and soldiers, rival Shia militias and political parties will be able to jostle for power among themselves.

Local people in Basra, however, fear that the security apparatus being left behind is insufficient to hold the city together.

“I expect an increase in attacks such as this car bombing because there is no unity between the parties in Basra,” said Adil Muhsen Abed, a 32-year-old office worker. “Each one of them wants to be in control.”

Mr el-E’abi, for his part, added: “The British forces must only pass on the security file to the Iraqi officers in the police and military once they are sure of their experience and loyalty.”

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