Britain is preparing to hand over control of Basra to the Iraqi army as early as next month, sparking renewed claims from the US that the British are preparing to "cut and run", according to a report in the Sunday Timesnewspaper.
The Iraqi army is on course to take control of Basra province by the autumn with October seen as the earliest point at which it would be ready, the report says, citing British government officials.
British prime minister Gordon Brown is expected to announce the withdrawal in a statement to the House of Commons when MPs return from the summer break.
The report suggests US commanders in Baghdad have accepted that British troops are on their way out of Iraq and this had prompted criticism from US military commentators.
The move would see most of the 5,500 British soldiers leave Iraq but some are expected remain at a base in Kuwait.
Meanwhile Iraqi prime minister Nuri al-Maliki today responded to critics in the US Congress, saying his government had kept the country from plunging into sectarian civil war.
Mr Maliki told a news conference his critics had crossed what he called a "reasonable line" and were encouraging militants trying to destabilise Iraq.
Democratic presidential hopeful Senator Hillary Clinton and other US politicians have called for Iraq's parliament to replace Maliki, a Shi'ite Islamist.
"They do not realise the size of the disaster that Iraq has passed through and the big role of this government, a government of national unity. The most important achievement is it stopped a sectarian and civil war," Mr Maliki said.
His comments came just over a week before US President George W. Bush's top officials in Iraq present pivotal reports on the country's security and political situation.
Mr Maliki said he did not want to prejudge the testimony by US commander, General David Petraeus, and Ambassador Ryan Crocker, which is to be delivered to Congress on September 10th.
"We have to wait until we know what is written," he said.
Mr Maliki is under mounting pressure from officials in Washington to show progress towards reconciling warring majority Shia Muslims and minority Sunni Arabs.