MILITARY chiefs today said that the number of British troops in Iraq could be halved early next year.
They claim that operations in Basra, in the south of the country, have proved to be a great success and the Army is close to reaching the "tipping point".
They hope that by February the number of UK service personnel serving in Iraq could be cut from 7200 to 3500 if the current campaign continues.
Operation Sinbad, which is aimed at purging Iraqi police of militia men, began last month and is seen as key to further weakening the position of Shia militants.
The latest six-month changeover of British forces begins this week and military leaders believe many of those heading home may not be needed in six months time.
The number of murders has dropped from around 30 a month in the south of Iraq to 11 in the past four weeks.
Operation Sinbad has also seen the army undertaking extensive repair work in Basra's 18 districts covering schools, broken drains and faulty lighting.
The regeneration work is said to have restored civic pride among ordinary Iraqis and weakened supports for the insurgents.
At the weekend Defence Secretary Des Browne said the UK was "quite far down" the road to withdrawal but was still dependent on the Iraqi security forces being able to take control of the southern province.
Military commanders hope a cutback would allow redeployment of UK service personnel to Afghanistan to support hard-pressed troops fighting the Taleban in the province of Helmand.
One senior military source said today: "If Operation Sinbad goes as well as it has done, then we can expect to substantially decrease our force by February at the earliest.
"There is a real sense that we are just short of that tipping point.
"If we can just push it over the edge everything will fall in a particular way."
In the Commons yesterday Mr Blair said that pulling out of Iraq now would be a "betrayal, not only of the Iraqi people but of all the sacrifices our armed forces have made".
He side-stepped calls led by former Foreign Secretary Sir Malcolm Rifkind for a full debate on Iraq on the Commons floor.
Senior sources at the US Defence Department in Washington have confirmed that British officials have informed them of the plan to withdraw large numbers of forces from Iraq in the coming year for redeployment to Afghanistan.
US President George Bush echoed Mr Blair's view that troops cannot leave until the "job is done" for fear that Iraq would become the staging post for terrorists and their training camps, as Afghanistan was under the Taleban.
"The road to victory will not be easy. We should not expect a simple solution," he said.
"Our goals are unchanging. We are flexible in our methods to achieving those goals."
The success of the Coalition in Iraq has become one of the key debating topics ahead of the US mid-term elections - something the White House is well aware of.
"The ultimate accountability rests with me," Mr Bush said.
"If people are unhappy about it, look right to the President."