THE Prime Minister of Iraq, Nouri al-Maliki, yesterday declared a one-month state of emergency in Basra, vowing to crush with an “iron fist” the fuel-smuggling gangs and death squads that have plunged the city into chaos despite the presence of several thousand British troops.

Mr al-Maliki flew down on an emergency mission, determined to end the sectarian violence that killed 40 people last month, including 9 British soldiers, and to settle the internecine feud among Shia political parties for control of Basra’s huge oil reserves.

Last night the 4th division of the Iraqi Army was ordered to Iraq’s second city, along with hundreds of police with sweeping powers to set up checkpoints, stop cars, make arrests without warrants and conduct searches of houses.

General George Casey, the top US commander in Iraq, told The Times that Shia insurgent groups have escalated their violence against US and British forces and said he detected an Iranian hand at play.

Mr al-Maliki told a meeting of 700 tribal sheikhs, religious leaders, army officers and other officials: “We shall use an iron fist against the leaders of the gangs or those who threaten security.”

His announcement was welcomed by the Foreign and Commonwealth Office, which said it “demonstrates the new Iraqi Government’s determination to get to grips with the situation in Basra”.

Two weeks ago Des Browne, the Defence Secretary, said it was “ridiculous” to suggest that the city was out of control.

Basra was once considered the success story of post- Saddam Hussein Iraq but now teeters on anarchy. There has been a sharp escalation in attacks on the nearly 8,000 British troops in Iraq’s southern provinces, including the shooting down of a helicopter in Basra last month.

The stakes are high for Basra, which keeps Iraq’s battered economy alive with its daily flow of oil exports into the Gulf. Insurgents regularly blow up Iraq’s northern pipeline to Turkey. Basra residents say that the root of the trouble is the fight for control of the city’s oil. This has pitted Mohammed Musbih Waeli, Basra’s Governor, from the fundamentalist Fadila party, against local branches of Mr al-Maliki’s own Dawa party, the Mahdi Army of Hojatoleslam Moqtada al-Sadr and the Supreme Council for the Islamic Revolution in Iraq, perhaps the most powerful Shia party in the country.

“The main dispute between the governor and the provincial council is on oil smuggling,” a Basra official said.

He said that the other fight was for a cut of lucrative reconstruction funds. Mr Waeli recently accused Shia clerics of fomenting Basra’s violence, sparking protests against him. But the Governor’s real motive was to secure access to the money himself, the official said.

The battle over oil has been compounded by rising Shia-Sunni violence. One doctor at Basra’s teaching hospital said: “During the past three days alone, we received 45 bodies. All of them were shot and most of them were killed for sectarian reasons. Most of them were Sunni.”

Akil Abdullah, a guard at an oil facility, said: “We are really worried because the ethnic and sectarian conflict is becoming evident in the city. Every morning we wake up to the news of another friend or relative killed.”

General Casey told The Times: “There is an increasing Shia component to [the violence] now. The Shia extremists are probably being supported with technology and weapons that are coming out of Iran.

“There is Iranian influence and Iranian support to Shia insurgent groups in Basra. But I don’t see the Iranians as a major factor in fomenting that violence. I think this is Iraqi business.”

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