A high-level panel set up to advise the White House on Iraq is to propose radical changes to US policy including the large-scale withdrawal of US troops, it has been reported.

The commission, which is headed by James Baker, the former Secretary of State under the first President Bush, will recommend two options which would effectively represent reversals of US policy.

One of these, called "Redeploy and Contain", would see the phased withdrawal of US troops to bases outside Iraq where they could be deployed against terrorist organisations anywhere in the region.

Another alternative, titled "Stability First", calls for continuing to try to stabilise Baghdad and boosting efforts to bring insurgents into politics, according to a report in the Los Angeles Times. Under this option, Iraq’s neighbours, Iran and Syria, would be brought in to help end the fighting.

The ten-member commission, called the Iraq Study Group, will release its recommendations in the coming months. It was set up by Congress but has been endorsed by President Bush.

Apart from Mr Baker, who is one of the Bush family's closest political allies, other members include Lee Hamilton, former Congressman, who also served as co-chairman of the commission investigating the September 11 attacks, Sandra Day O’Connor, retired Supreme Court of Justice, and Leon Panetta, a Californian Democrat who was President Bill Clinton’s chief of staff.

It is unclear how willing Mr Bush is to change his strategy, which centres around improving security in Baghdad, training Iraqi security forces, and pushing the Iraq government to find political agreement amongst rival groups. The President has insisted on more than one occasion that the US will not leave Iraq "until the job is done", but last week he also said in a news conference that he was open to ideas.

When the panel was formed in March, it was hoped by some administration officials that it would produce a bipartisan endorsement of existing policy. But as sectarian violence in Iraq has worsened, there have been increasing calls for the White House to rethink its policy, with even senior Republicans saying that changes are necessary.

While refusing to comment directly on the report in the LA Times, White House officials have been eager to make clear in recent weeks that while they intend to look seriously at the panel’s recommendations, there was no obligation for the President to follow them. "We’re not going to outsource the business of handling the war in Iraq," said Tony Snow, the White House spokesman.

Crucially, a third option on Iraq, entitled "Stay the Course, Redefine the Mission", appeared to gain less interest from the panel according to the LA Times, with members reportedly agreeing that change had to be made.

"It’s not going to be ‘stay the course,’" the newspaper quotes one participant as saying. "The bottom line is, (current policy) isn’t working. There’s got to be another way."

Mr Baker has hinted in recent weeks that the report would recommend changes, some of which the White House would not necessarily welcome. "There’ll probably be some things in our report that the administration might not like," he said in a television interview last week.

"Our commission believes that there are alternatives between the stated alternatives, the ones that are out there in the political debate of 'stay the course' and 'cut and run,' " he added, also implying he had considered the option of reaching out to Iran and Syria.

"I personally believe in talking to your enemies," he said. "Neither the Syrians nor the Iranians want a chaotic Iraq ... so maybe there is some potential for getting something other than opposition from those countries."

Another participant, speaking anonymously, revealed that the commission was also considering whether the US should threaten the Iraqi government that it would withdraw troops unless its performance improved.

But yesterday in a telephone conversation, Mr Bush told Nouri al-Maliki, the Iraqi Prime Minister, that he had no plans to pull forces out of the country, insisting that the US would continue to stand strong despite the daily violence which has plagued the nation.

A rise in American casualties in recent weeks, as communal violence spirals ever more out of control, has served only to boost the likelihood that the President will face increasing pressure to change his policy. At least 58 Americans have died in Iraq in the first two weeks of October, a pace that, if continued, would make the month the worst for coalition forces since 107 US soldiers died in January 2005.

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