Gordon Brown is facing further pressure to withdraw British troops from Iraq without delay after two senior military commanders told him that no more can be achieved.

According to a press report yesterday, the government has been told that 5500 troops deployed in south-east Iraq should be withdrawn immediately. It has always been the government's intention to withdraw British troops as soon as it was militarily advisable, and Mr Brown reiterated that position when he met George W Bush at Camp David last month.

Referring to the decision to hand over security in Basra province - the last of the four held by the British , he said: "(the decision) will be made on the military advice of our commanders on the ground."

According to the report in the Independent on Sunday, two generals have told him there was "nothing more" they could do in Basra.

The withdrawal of 500 troops has already begun but the commanders want to hand over Basra Palace by the end of August. The 500 troops in the palace are a constant target, subjected to up to 60 rocket and mortar strikes a day. The resupply convoys have been described as nightly suicide missions.

According to a report in yesterday's Sunday Times a military adviser to President George W Bush has warned that British forces will have to fight their way out of Iraq in an ugly and embarrassing retreat.

Stephen Biddle, who also advises the US commander in Iraq, alleged that Iranian-backed Shi'ite militias in the south would try to create the impression that they were forcing a retreat.

"They want to make it clear they have forced the British out. That means they'll use car bombs, ambushes, rocket propelled grenades, and there will be a number of British casualties."

The MoD said the British were not heading for defeat but acknowledged that the militias were trying to claim credit for driving them out.

Senior British sources believe that withdrawal from Basra could cost the lives of 10 to 15 soldiers but plans are expected to go ahead to pull back to a single base at Basra airport to prepare for the eventual departure.

Commanders point out that up to 90% of the violence is directed against their forces, and they are adamant that it was never their remit to intervene in a turf war among factions of the same community, all of which are linked to the government coalition in Baghdad.

The Prime Minister has promised a Commons statement on Iraq soon after Parliament returns from the summer recess in October but he has agreed with President Bush that no decision will be made to withdraw until after General David Petraeus, the US commander, delivers a report to Congress next month on the progress of the Americans' "troop surge".

General Petraeus is expected to report mixed results, and to plead for more time for the surge to work but, however strong his arguments, for political reasons, the White House will be tempted at least to announce some troop reductions. As well as pressure from Democrats, President Bush is facing mounting pressure from Republicans, as they prepare to stand for re-election in 2008.

Mr Brown will have to consider the politics as well as the military effect of any troop withdrawal. Already criticism of the UK's intention to withdraw from southern Iraq has been criticised in the American press. The priorities now, according to military sources, are for an orderly withdrawal with the reputation and capability of the Army "reasonably intact" and for Britain to remain "a credible ally".