Britain will hand control of security in Basra to the Iraqi authorities on Sunday but officials warned of challenges ahead as a triple car bombing in another southern Iraqi province once controlled by British troops killed more than 40 people.

The handover of the last of four provinces held by British forces since the 2003 invasion marks a “milestone”, according to the most senior British officer in Iraq. The symbolic shift in Britain’s role will see UK forces focus increasingly on economic development and reconstruction rather than fighting insurgents.

“It has always been about getting Iraqis to the point where they can take control and we have got there or we will have got there shortly,” Lieutenant-General Bill Rollo told The Times during a day-trip to Basra from Baghdad where he is based. The number of British troops on the ground is due to fall to 2,500 from 4,500 by next spring.

Some local Iraqi citizens express alarm at the thought of British soldiers relinquishing control of security in Basra to the Iraqi army and police, which are often accused of colluding with or turning a blind eye to militia activity. But Iraqi leaders and British commanders insist that the time is right.

“The battle has not ended,” said Nouri al-Maliki, the Iraqi Prime Minister. “We have not entirely defeated those who do not wish to see the province progress, but we have taken major steps in this direction and we are winning,” he told an economic development forum at Basra Airport, attended by senior British, Iraqi and American officials.

Douglas Alexander, the Secretary for International Development, attended the conference, which saw a string of new initiatives unveiled aimed at breathing life back into Basra’s battered but potentially hugely profitable economy.

Mr Alexander said: “There are continuing challenges in relation to security but we have worked hard ... to develop the capability of the Iraqi security forces. Our key challenge is not to spend significant sums of British money but to assist the Government of Iraq and the provincial authorities in facilitating the effective expenditure of Iraqi resources in the service and in the pursuit of the economic development that we both want to see.”

Highlighting the difficulties of British involvement in the reconstruction effort, however, Mr Alexander was prevented by security concerns as well as time constraints from venturing into Basra city.

In addition, the economic forum - which was also attended by Christopher Prentice, the British Ambassador to Iraq, Barhem Saleh, the Iraqi Deputy Prime Minster, and Steffan de Mistura, the top United Nations official in Iraq - was held at the airport where British troops are based rather than in the city centre.

The car bombings in Amara that left at least 40 people dead and some 125 wounded also underscored the ongoing dangers. Amara is the capital of Maysan province, which was under British security control until April.

The city authorities, however, rejected offers of assistance from the British military in the wake of the morning blasts that ripped through a busy street, insisting that they could handle the situation.

Mr Alexander said: “I would contrast the indefensible terror of such attacks ... with the palpable sense of hope which was present at the development forum at which I spoke today. Notwithstanding what I fully recognise are continuing security challenges, Basra now faces a moment of real possibility where on the basis of the progress that has been made in relation to security in recent months there is the opportunity for Iraqis themselves to seize that moment.”

One local woman did not agree with the minister’s assessment, admitting that she was frightened at the prospect of British troops taking an ever greater backseat. “It is still very dangerous. The British forces should still support the Iraqis and stay in Basra,” said Um Rhiam, aged 43, who belongs to a woman’s rights organisation and was attending the conference. “The security is very bad especially for women.”

In the past five months more than 40 women have been murdered by militiamen either for sectarian reasons or because they were not covering their heads with a Hijab, or Islamic scarf.

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