British Army to hand over Iraqi province by January

British forces expect to be able to hand over Maysan province to Iraqi control by "around the end of the year", to allow UK troops to concentrate on Basra. Defence sources said they were confident that by January, three of the four provinces under British control would be under Iraqi administration.

The optimistic assessment would allow the UK to reduce the number of British troops serving in Iraq from 7,200 to 3,500 by next year. Following the handover, British troops would be on standby to help to support Iraqi forces.

Defence sources said commanders on the ground were encouraged by progress in defeating insurgents in Basra with a programme of rebuilding and employment. Four thousand local people have been given jobs, funded by British and US money.

Now the operation to rebuild the Iraqi infrastructure is to be extended to 16 areas of Basra. The campaign to give Iraqis a stake in a peaceful future includes investing in schools for 6,000 children. The coalition is also repairing electricity and water supplies and roads. British forces are also attempting to retrain the police, who have been linked to death squads, to instil public confidence in them.

"We are focusing on five areas," said one source. "No one is saying it's a runaway success, but there are a number of immediate improvements: 33 schools, three hospitals and three health clinics are being improved. We are doing building work, and providing new equipment."

The decision to tackle the most peaceable areas of Basra first is designed to convince those in areas dominated by insurgents that the rebuilding programme is in their interest. Sources said that the next six months were crucial to the scheme's success.