The Foreign Office said: "We deeply regret that the Security Council has not been able to adopt a position on this resolution which would have made it clear that Saddam Hussein was the aggressor."
Several attempts were made to get the wording right, and there was support for Britain's initiative from the council's 15 members. But Russia increasingly made it clear it would veto any such move and Britain last night withdrew the resolution.
The deadlock illustrates the crumbling of the coalition that backed Washington in the Gulf war.
William Perry, the US Defense Secretary, was upbeat earlier yesterday saying Saddam Hussein's decision to pull south his forces in northern Iraq was one of a number of "positive developments" in northern Iraq. As well as withdrawing from the Kurdish town of Arbil, Iraq's forces had stopped shelling the town of Chamchamal, south-east of Arbil, Mr Perry said.
He knew of no evidence that Turkey had entered the fighting. Asked whether the Clinton administration was satisfied that Saddam was complying with US demands to halt his aggression against the Kurds, Mr Perry said: "So far, so good. But I do not want to be complacent."