British troop levels in Northern Ireland are still three times higher than the 5,000-strong garrison planned once the paramilitary threat is lifted, the Independent Monitoring Commission (IMC) has said.
Overall troop levels are now at just under 15,000.
In its second report published today, the IMC said half of all British military spy towers in Northern Ireland have been demolished in the last five years. The British government has also shut nearly half of the army bases needed to reach its peacetime target, the assessment showed.
With helicopter operations are down by a third and soldiers withdrawn from many police stations over the same period, the IMC pointed to significant progress in normalising the security situation in Northern Ireland.
The commission, which has already delivered a scathing dossier on continued paramilitary activity, has now turned its attention to demilitarisation.
British prime minister Mr Tony Blair has pledged to slash the army's strength once the IRA declares its war is over for good.
Although no announcement from the Provisionals is imminent, several military bases have been closed down.
Moves to scale down security between the time the British government issued its Security Strategy Paper in December 1999 and the end of May 2004 have been assessed by the IMC.
The report stated: "When the British army are at garrison strength, there would be some 5,000 personnel in Northern Ireland - about a third of the present figure.
"The gap between current actual deployment and the envisaged peace time level is still very wide therefore."
Even though it will make no comment on the speed of change until Downing Street publishes a normalisation programme, the body has drawn together progress to date.
It also confirmed:
10 out of 19 towers and observation posts have been demolished.
By September soldiers will guard 12 police stations, compared with 20 in 1999.
Military bases and installations have dropped from 32 to 24, with the end target 14.
Army helicopter use has been reduced by 33 per cent from nearly 25,000 operational hours in 1999 to 16,500.
Overall troop levels available in Northern Ireland are just under 15,000.
Responding to the report, Sinn Féin Assembly member Mr Alex Maskey said that nationalists and republicans "knew only too well the effects of Britain's war machine in Ireland as they experience it on a daily basis".
"The IMC [has] already shown itself to be a willing tool of both the PSNI Special Branch and other securocrats within the British system. It operates outside the terms of the Good Friday Agreement and has no credibility within the nationalist and republican community," he said.
Mr Maskey said that rather than wasting time engaging in a "cosmetic exercise" with the IMC trying to convince people that they are demilitarising, it would be "more appropriate for the British government to begin honouring its commitments and dismantling its war machine in Ireland".