A confidential report by the outgoing British ambassador in Baghdad says civil war and the break-up of Iraq is more likely than the country developing into a stable democracy. The bleak assessment of the situation by William Patey, who left Iraq last week, is wholly at odds with more optimistic claims by George Bush and Tony Blair.
The memo, leaked to the BBC, admits the most likely outcome in Iraq is "a low-intensity civil war and a de facto division of Iraq". The warning was disclosed as two of America's most senior generals also admitted the surge in sectarian violence in Baghdad in recent weeks raises the possibility of Iraq descending into civil war. General John Abizaid, the US commander in the Middle East, and General Peter Pace, chairman of the Joint Chiefs of Staff, said all-out civil conflict was a distinct possibility.
"Iraq could move toward civil war" if the violence is not contained, General Abizaid told the Senate Armed Services Committee. "I believe that the sectarian violence is probably as bad as I have seen it." US and British officials have persistently denied there is a civil war although UN figures show at least 3,000 people being killed in June.
The Foreign Office, seeking to put the most positive gloss on Mr Patey's words yesterday, could only point out that he had said the situation in Iraq "is not hopeless". The memo says: "Even the lowered expectation of President Bush for Iraq - a government that can sustain itself and is an ally in the war on terror - must remain in doubt."
This means the Iraqi government has no real power or authority despite the addition of 100,000 US-trained Iraqi troops and police over the past year. By this June, there were 264,000 Iraqi soldiers and police under arms but their increasing numbers have failed to provide more security since the civilian death toll has risen each month.
This fatally undermines the US and British policy which is based on the supposition that, as more Iraqi security forces become available, they will be able to draw down the number of troops they have in Iraq. But the US decided last week to increase the number of troops it has in Baghdad by some 5,000 soldiers because control of the capital is slipping further and further out of government hands.
Yesterday, at least 12 people were killed and 29 injured when a bomb strapped to a motorcycle exploded near Rusafi Square in the centre of the capital. Electricity is available only six hours a day at best and people can no longer use generators for lights because petrol is too expensive.
The problem for the Iraqi government is that it does not really control its own armed forces, which often take their orders from Kurdish, Sunni or Shia communal leaders. Sunni districts in Baghdad see the police and police commandos as officially sanctioned death squads. Shia districts say only their own militiamen can protect them from suicide bombers.
Mr Patey sees the main Shia militia, the Mehdi Army loyal to the nationalist cleric Muqtada al-Sadr, as a growing threat. He says: "If we are to avoid a descent into civil war and anarchy then preventing [the Mehdi Army] from developing into a state within a state, as Hizbollah has done in Lebanon, will be a priority."
But the growing US and British pressure on the Mehdi Army is seen by many Shia as an attempt to rein back their community, 60 per cent of Iraqis, from taking power despite its success in elections last year.