Basra will remain a hotbed of violence after the British leave, it was claimed today.
Experts have predicted the main feeling among many local people will be fear.
Some Iraqi residents predict all-out war between rival militias while Richard Jones, Britain's consul general in Basra has told the BBC the local police force had been infiltrated by hard-line Shia militias.
“It is Hell on Earth down there,'' according to Dr Toby Dodge, the Iraq expert at the University of London.
Describing troop withdrawal plans as “a cut and run from Basra,'' he said:
“You have got a competing struggle for power between three militias and criminal gangs.
“There is no law and order and a great deal of criminality and violence. You have different criminal gangs struggling to control the oil smuggling.
“If you are a militia boss, the overall feeling is probably one of optimism.
“For the local people on the street it must be one of high anxiety, instability and overwhelming fear.''
British troops vacated their last remaining downtown Basra base last month, accelerating calls from the British public to reduce force levels further.
Today prime minister Nouri Maliki said Iraqis will take over security from British troops in Basra in two months as British Prime Minister Gordon Brown confirmed there will be a 1,000-strong troop withdrawal.
Moving from a “combat'' to an “overwatch role'', handing over to the Iraqis, Mr Brown is hopeful they will be home by Christmas.
Britain currently has about 5,500 soldiers based mainly at an air base on the fringes of the southern city of Basra, Iraq's second-largest city, 340 miles south-east of Baghdad.
Politically and socially what remains behind, built on the intra Shi'ite political fighting, is locked into the complexities of modern life in the oil-rich region in the deep south of Iraq.
The number of Iraqis driven from their homes by war and sectarian violence remains unclear.
Some have noted a deterioration in the situation in recent weeks.
Karim al-Miahi, the head of the Basra security committee and a member in the provincial council, said: “The withdrawal of the British forces has had a negative effect on security in the city.
“Iraqi forces still are not able to control the situation which has deteriorated over the past three weeks.
“There has been an increase in assassinations of police and religious leaders. As for the areas around the British base, the situation is more stable. Shelling there has stopped.''
In August, the governor of neighbouring Muthana, one of three southern provinces already turned over to Iraqi control by the British, was assassinated in a bombing.
Suspicion has fallen on Sadr's Mahdi Army militia as the governor had links with the rival Supreme Iraq Islamic Council and its Badr Corps militia.
Britain's Defence Ministry said rocket and mortar attacks on their base at Basra airport had fallen sharply in the last month, with only a few attempted strikes.
Britain insists the Iraqi forces are able to guarantee security.
How much any of this could be undermined by the power struggle between rival Shi'ite factions is unknown.
But speaking in the fortified Green Zone, Mr Brown called for a renewed effort by the Iraqi political parties to achieve political reconciliation.
He also announced plans for a new investment agency and development fund for Basra to help regenerate the economy.
Mr Brown said: “I am very proud of what our armed forces are achieving here.
“I believe they have acted with great courage, professionalism and bravery.
“We will discharge our obligations to the Iraqi people and to the international community and we will discharge our obligations to our armed forces, who are doing this difficult job.''
