When British troops handed over power in the province of Basra to the Iraqi government in December, we were told that the withdrawal was confirmation of the growing stability in the south of the country. Now we see just what nonsense that was.

Yesterday in Basra there was an outbreak of fierce fighting between Shia militias and the Iraqi army. Moqtada al-Sadr, the leader of the Mehdi Army, has called for a campaign of civil disobedience in protest at the arrest of his followers by US and Iraqi forces.

The situation is horribly complicated by the fact that the militias have infiltrated the Basra police. With loyalties so blurred, it is difficult to discern where one side begins and another ends. In as far as it is possible to identify the roots of this confrontation, it seems to be a battle for control of Basra's lucrative oil-smuggling routes.

But whatever the cause, it hardly indicates the settled province that British politicians and military commanders depicted when our troops left Basra palace four months ago to adopt an "overwatch" role from the airport on the outskirts of the city. Our forces have deployed air cover to support the Iraqi government forces, but there is no real prospect of our remaining 4,100 troops returning to the fray. No one indicated in December that the concept of "overwatch" would be quite so hands-off.

This fighting also helps to expose the idea that Iraq itself is somehow on the highway to recovery, as many of the invasion's original supporters have been suggesting of late. The war's advocates have given credit for a downturn in violence since last summer to the deployment of 30,000 more US troops in Baghdad, the so-called "surge" strategy.

But actually, the relative calm has been the result of a combination of the de facto sectarian partition of the capital and the ceasefire imposed by al-Sadr on his militia. Now that ceasefire is apparently on the verge of breakdown, we see how tenuous the "improvement" in Iraq has been.

It is true that the Sunni tribal leaders, formerly at the forefront of the insurgency, have turned on al-Qa'ida and are working with the US military to expel the fanatics. But these leaders never reconciled with the Shia government or the various Shia militias. The sectarian divide in Iraq is as deep as ever.

Our own government might have managed to see off last night's attempt in the House of Commons to force an immediate public inquiry into the 2003 invasion of Iraq. But, as Basra burns and yet another fanciful claim of progress in the country disintegrates, the charge sheet against those who embroiled us in this catastrophe grows still longer.