Speaking after a weekend trip to Baghdad and Basra, he said that Iraqi forces would increasingly take full charge in the south of the country, where British troops have been based since the 2003 US-led invasion.

The latest British plans come a day after US Democratic presidential hopeful Barack Obama said Iraqi Prime Minister Nuri al-Maliki had expressed support for a pullout of US troops by 2010.

Next year's scale-back would hopefully come after its switch from frontline duty to training and mentoring this year, said Brown.

"Just as last year we moved from combat to overwatch, I would expect a further fundamental change of mission in the first months of 2009," he said in an update to lawmakers on his Iraq trip.

"We will continue to reduce the number of British troops in Iraq," he said, while insisting that all decisions would be based on advice from military commanders on the ground.

Brown gave no further details of the change in mission, but said military commanders expected control of Basra airport would be handed to the Iraqis "by the end of this year."

Details of any potential drop in British troop numbers in Iraq will not be available at the earliest until Defence Secretary Des Browne makes a statement in the autumn, when the next troop rotation is set to be announced.

British forces handed back Basra province to the Iraqis in December and cut troop levels from 5,500 to 4,500.

But a further drawdown to 2,500 was suspended after Iraqi forces launched a clampdown against militias in March, Brown said.

Since then Britain has embedded 800 British troops within the Iraqi command structure, and cut overall numbers to 4,100, he said.

Local government elections in Iraq should be held by the end of 2008, while the first stage of training Iraqi troops should be over "around the turn of the year", Brown said.

The training of specialist military forces should be completed during the first months of next year, he added.

"As we complete these tasks -- and as progress continues across those different areas -- we will continue to reduce the number of British troops in Iraq."

Ultimately the reduced presence would allow Britain to "make the transition to a long-term bilateral partnership with Iraq," as Britain's military had with other important countries in the region.

"Of course, future decisions will be based -- as I have always said -- on advice of our military commanders on the ground," he said.

Brown's comments came after Barack Obama, visiting Iraq, said Monday that Maliki had expressed his support for a pullout of US troops from Iraq by 2010.

Maliki and US President George W. Bush have agreed to include a "time-horizon" for the withdrawal of US forces in a security pact still being negotiated.

The British announcement also came after a parliamentary oversight committee on defence published a positive report on the situation in Basra.

The all-party Defence Select Committee said there had been an "obvious and substantial improvement" in security since their last visit, and the Iraqi army clampdown -- Operation Charge of the Knights -- had been "broadly successful."

Challenges remained, they added, but said training and development of Iraqi forces was now the priority for British troops.

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