In his sombre assessment, Lieutenant General Nick Houghton told the Commons defence committee:

"There is a worrying amount of violence and murder carried out between rival Shia factions. There is no doubt that it has got worse of late due to the protracted period of talks to form the government."

The residents of Basra are only too aware of this. Iraq's second city, and the headquarters of British forces, is a place of killings, kidnappings and extortions.

Defence secretary Des Browne has spoken of the "long-term aim of handing over responsibility for security to the Iraqi army and police", but has declined to define what "long-term" means.

The problem is that those responsible for this wave of terror are often the police themselves. Much of the police force has been taken over by the Shia militias, the Badr Brigade and the Mahdi Army.

Earlier this month a Sunni mosque was stormed by the overwhelmingly Shia police force, leading to 12 deaths. The attack came a day after a bombing at a marketplace which killed 28 people. The police said they wanted to search the mosque after receiving intelligence that arms and explosives linked to the marketplace bombing were being stored there. They claimed they only returned fire after people inside the mosque began shooting at them. Omar Rashid, who was injured in the exchange, has a different account of events.

"What the police are saying is untrue. This was not the first time they have raided this mosque and I am sure they will come again, " he said. "They have torn religious books because they showed Sunni beliefs. They have taken money from the mosques as well. They call us terrorists and Baathists, but that is just an excuse they are using to drive what is left of the Sunni community out of southern Iraq. I have had two members of my family killed and another 10 have now fled."

Iraqi prime minister Nouri al-Maliki declared a state of emergency in Basra last month. The decision is said to have taken British officials by surprise and was seen as a flexing of muscle by the new prime minister. Similarly, the decision to withdraw from four provinces in the south came as a result of Iraqi "encouragement".

As the British withdraw, the security vacuum in urban areas will be filled by a partisan and corrupt police force. One British officer said: "This is something very, very troubling. We have a duty of care to look after the Iraqi people. We will not be doing that by handing them over to the Iraqi police. The fact is that the militias did not have to infiltrate the police. We invited them to join as part of a d-militarisation process. We were told that this has worked in Sierra Leone. But it should have been abundantly clear that Iraq is not Sierra Leone."

There are allegations that Iran is supplying funds and weapons to the Badr Brigade which was formed in Tehran during the Iran-Iraq war. The brigade, which has enormous influence within Iraq's ruling Shia parties, has been accused of running death squads in Baghdad.

Other reports say the Iranians are hedging their bets by providing support to the Mahdi Army as well.