Tony Blair yesterday announced the first step in a phased withdrawal of British forces from Iraq with the return of about 1,600 troops over the coming months.

The pull-out from British-controlled southern Iraq was smaller than had been expected, with about 5,500 of 7,100 force remaining.

Last month, Defence Secretary Des Browne said he expected troop numbers to reduce by a "matter of thousands" before the end of the year, while commanders have spoken of halving the size of the British force.

The Prime Minister's statement in the Commons left open the possibility of further withdrawals as Iraq forces were increasingly able to assume responsibility for security.

He said troop levels could be reduced - "possibly to below 5,000" - from late summer. However, there was no detailed timetable for withdrawal, as some reports had predicted.

Mr Blair also disclosed that the handover of Basra to full Iraqi control, which had been expected in spring or early summer, would not take place until the second half of the year.

While the number of murders and kidnappings in the city had fallen and many extremists had been arrested or fled, Mr Blair acknowledged that significant problems remained, telling MPs: "It is still a difficult and sometimes dangerous place."

The announcement follows the completion of Operation Sinbad, launched last September by British and Iraqi forces, to purge the city's districts of extremists and to restore security.

Although the operation was intended to drive out the Shia militias that have heavily infiltrated the police, the Ministry of Defence disclosed that 45 per cent of the city's police stations were still not assessed as satisfactory.

Mr Blair said the remaining British force, which would largely withdraw to the main airbase in Basra, would retain the ability to mount operations against extremist groups and respond to any request for support by the Iraqi army.

British troops will also continue to train Iraqi forces and to provide security along the border with Iran, where deadly roadside bombs that have been used to attack British forces have been smuggled into Iraq.

In the Commons, Conservative Party leader David Cameron welcomed the troop withdrawal but said that the security situation in Basra remained ''dire''.

He urged Mr Blair finally to accept the need for an inquiry into the Iraq war.

''The fact is that while many of us in this House supported the intervention in Iraq, there have been many, many bad mistakes," he said.

"Isn't it essential that we learn the lessons of those mistakes?''

Liberal Democrat leader Sir Menzies Campbell said the Government should now set a timetable for the full withdrawal of British forces.

''I still believe that our presence exacerbates the security situation and we should have a target for the withdrawal of all British troops by the end of October this year,'' he said.