Speaking at the Foreign Press Association in London, Reid paved the way for a "significant" reduction in troop numbers by 2007. He made clear it was ultimately up to the Iraqis to look after themselves, saying Britain could leave once the insurgency had reached a "manageable" threat level.

Reid once again vowed Britain would not "cut and run" from Iraq, but his language differed significantly from that employed in the past by U.S President George W. Bush and British Prime Minister Tony Blair, who until recently insisted the coalition would stay in the country until the insurgency was crushed.

"Our key task is not ... to defeat the insurgency ranged against Iraq," he said. "It is to ensure that Iraqis have the ability to do that."

The defense secretary laid out the specific conditions for troop withdrawal, saying: "We need to see a manageable level of threat from insurgents ... the Iraqi security forces must be more able to deal with this threat themselves."

Britain had to be confident that it could provide support and backup to local forces if needed, he added.

He warned that as responsibility for security was handed over to Iraqi forces, the insurgency would likely become "ever more frenetic."

"Handing over security responsibility is not likely to be rapid or simple... The extremists will attempt to step up efforts to derail this process as it unfolds."

Reid said there was confusion about how Iraq would look when Britain's 8,500-strong force could come home.

Victory was not easily defined, he continued. When coalition troops left Iraq would not be a "trouble-free society."

"The point at which Iraqis are fully in control of their nation again will not be the point when attacks cease, when infrastructure is without fault, when there is nothing left to do.

"The day we leave will not be the final step on the road for the new Iraq. It will be the start of a new journey ahead," he said.

"We cannot say what Iraq will ultimately look like beyond that. That is a matter for the Iraqis."

His comments came amid considerable speculation about a drawdown in troop levels this summer. Reid refused to address issues of troop numbers or dates Tuesday, saying to do so would be to "invite chaos."

But a memo signed by Reid and leaked last July revealed U.S. and British hopes to slash troop numbers by more than half by the middle of this year: from 176,000 U.S. troops to 60,000, and from 8,500 British troops to 3,000.

Reid's latest remarks can be seen as the culmination of a gradual redefinition of "victory" in Iraq by London and Washington, forced by mounting anti-war sentiment on both sides of the Atlantic.

With the U.S. military death toll now well over 2000 and Bush's approval ratings hitting an all-time low before Christmas, there is little public or political appetite for a prolonged engagement with no foreseeable end.

But Reid rejected suggestions that the coalition was recalibrating the conditions for withdrawal.

Neither were his remarks a recognition that the coalition had been unable to achieve its original aims, he said.

"It is saying that we have taken a country that has been ground into the dust, divided by the brutality of a fascist regime for decades, brought to the edge of economic catastrophe by sanctions, suffered the intervention of a war, and therefore to say that we would wait until everything is perfect before we hand over to the Iraqis ... is unrealistic and unfair."

He denied that the coalition had underestimated the strength of the insurgency, but acknowledged that there would be elements remaining in Iraq after the security handover who were "irreconcilable with democracy."

However the handover would not happen "on one day," he stressed. It was a process whereby Iraqi forces would first participate in, then lead security operations with the backing of multinational forces; they would then switch to "tactical overwatch," conducting operations alone with "multinational forces moving back," Reid said.

The next stage would be "operational overwatch," when multinational forces moved to barracks and took troops off the streets, which, Reid said, "reduces that element of excuse or cause that people are fighting against us."

Finally, the strategic handover would take place, when multinational forces left the country.

Reid said there were some areas under British control which were relatively quiet, and where that handover could begin this year. If the security situation worsened it could be postponed, he added.

People would now "no doubt complain that we're leaving too early," he said. However, he continued, it was important to understand "the realistic world" in which the Iraqi people would be operating in after the multinational forces left them to shape their own future.

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