The repercussions of the decision to withdraw the last 500 British troops from Basra city last September are only now beginning to unfold.

While the British Government insists that handing responsibility for security to the Iraqis was right, in retrospect the withdrawal was premature, leaving the military commanders blind to what was going on in the city: in effect a takeover by Iranian-backed Shia militia and criminal groups. “It was a bad day for the British Army,” one senior defence source has admitted to The Times.

Worse still was the small print of the deal fixed between the British military and leaders in Basra of the Shia al-Mahdi Army – supporters of the fiery cleric Moqtada al-Sadr – under which it was agreed that Britain’s military would stay out of the city and remain encamped at its base at the airport.

When Nouri al-Maliki, the Iraqi Prime Minister, found out about the “accommodation” he was said to be furious. His anger led six months later to the surprise decision to send 30,000 Iraqi troops, backed by more than 900 American Marines and US Apache attack helicopters, into Basra on March 25 in Operation Charge of the Knights to take on the Shia extremists – ignoring the 4,000-strong British contingent at the Basra airfield.

General David Petraeus, the US Commander of the multinational force in Iraq, made it clear after the withdrawal of the 500 British troops from Basra palace last September that he had given his blessing to the pullout. Hinting at the deal with the militia, he acknowledged the wisdom of the British approach to counter-insurgency – that “you reconcile with your enemies, not with your friends”.

However, the accommodation with the militia meant that even the SAS was unable to operate inside Basra for fear of breaching the deal. Despite the diplomatic tact shown by General Petraeus, US commanders lower down the chain of command became disillusioned with the way that the British were operating in the south.

No one denies that Basra is now a safer place. According to General Jack Keane, a retired US commander close to General Petraeus and the White House, and formerly a critic of the British strategy in the south, the will of the Iranian-backed Shia militia in Basra has been broken.

Brigadier Julian Free, Commander of the British 4 Mechanised Brigade who was involved in the March operation, denies there was a US takeover of Basra. He says it was a combined effort and that the focus by the US-led Multinational Corps had changed the atmosphere. The troop numbers have now changed, with

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