The Iraqi Government has banned alcohol in Baghdad’s heavily fortified green zone, home to foreign embassies and some legendary drunken parties in recent years.

Sales of drink are to be banned from Sunday, The Times has learnt, and Iraqi military patrols are already confiscating booze wherever they find it. “It is a new rule from the Prime Minister,” said an Iraqi army officer at a green zone checkpoint. “Alcohol cannot be sold or transported. If you want to bring a gift for someone, get a Pepsi.”

Venues such as the Freedom Restaurant, near the American Embassy, have been told that they will lose their government licences if they continue to serve alcoholic drinks, and the International Zone Liquor Store has been given a few days to sell its stock before closing.

There are varying interpretations of the ban. Some see it as a sign that hard-won freedoms are receding. Others say the ostentatious application of Islamic rules is an election ploy. Yet others believe that the Prime Minister is sending a subtle message that he thinks it is time for foreign occupiers to go home.

Senior Iraqi officials living in the green zone are not exempt from the new rules. Abdul Bari al-Zebari, a Kurdish member of parliament, was forced to give up two bottles of Chilean red when stopped by guards at the entrance to his residential compound. “It’s a sign of how the tables have turned,” he said. In the past few years, the compounds that make up this part of central Baghdad have been the site of bacchanalian revelry reminiscent of 19th-century colonial life. Stumbling fully clothed into one of Saddam’s palace pools was a rite of passage for young neoconservative Americans sent over after the invasion.

But on July 1 the Iraqi Government took control of the green zone, a symbol of occupation for many Iraqis, and since then the welcome mat has slowly been rolled back.

Foreign embassy grounds are sovereign territory, and so exempt from the ban, but staff have not reacted in the most diplomatic fashion.

One South African security guard is said to have threatened an Iraqi police officer with a gun during a stand-off over a bottle of Smirnoff. “Baghdad is hard enough when you’re medicated,” said a senior European diplomat.

At the bar in the UN compound, drinkers were stunned by the news. “Sobriety is a 12-step suicide programme here,” an aid worker said.

A friend agreed, adding: “Might as well go home. Perhaps it’s time to withdraw from Iraq.”

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