Britain will reduce its force in Iraq - now numbering more than 5,000 - to 2,500 troops from spring next year, Prime Minister Gordon Brown said today.
Mr Brown also promised a resettlement package for some Iraqis who had worked with British forces for more than a year to move within Iraq or apply to come to Britain.
In an address to parliament on policy in Iraq, Mr Brown said British forces in southern Iraq would be moving from a fighting role to an "overwatch" role.
Responsibility for security in the southern Basra province would be handed to Iraqis over the next two months, and then a new phase requiring a smaller British role would begin next year, he said.
"Existing [Iraqi] staff who have been employed by us for more than 12 months and have completed their work will be able to apply for a package of financial payments to aid resettlement in Iraq or elsewhere in the region, or in agreed circumstances for admission to the UK," he said.
Earlier Mr Brown confirmed that he considered a snap election but said he wanted more time to set out his "vision for the future of the country".
Mr Brown said his "first instinct" was always that he needed more time to show voters how he was governing the country before going to the polls.
He refused to blame advisers for the election frenzy that built up ahead of his announcement this weekend that there would be no poll. "I take full responsibility for everything that has happened," Mr Brown said.
Following his announcement on Saturday that he would not go to the country this year, Conservatives accused Mr Brown of being a "bottler".
Tory leader David Cameron said he was treating the voters like fools by trying to claim that his decision was not driven by Labour's sudden slump in the polls.
PA