Lt. Col. Patrick Sanders, commanding officer of 500 troops who vacated their last base in downtown Basra on Sunday, said he believed Britain's campaign is at "the beginning of the end."
Troops stationed inside Basra had been engaged in fierce clashes with the Madhi Army, the military arm of Shiite cleric Muqtada al-Sadr, but had not been stopped from carrying out patrols, Sanders said.
"We are engaged - or we have been engaged - effectively in a proxy war with Iran," Sanders told British Broadcasting Corp. radio. He acknowledged that if the Madhi Army turns its sights on local Iraqi security forces, British troops may need to return to the city to help.
Rival militias and Madhi Army fighters "have thrown just about everything they have got at us," Sanders said. "They have been unable to engage us in open fighting. We have been able to patrol around the city at will, on foot and in vehicles, any place or time of our choosing."
Sanders, whose men are now stationed with 5,000 colleagues at an air base on the fringes of Basra, said he believed British forces would remain in Iraq into 2008.
"We are not necessarily in the endgame, but perhaps - to paraphrase (Winston) Churchill - it is the beginning of the end," he said.
Prime Minister Gordon Brown has refused to say whether Britain will cut its 5,500 troops when it hands security responsibilities for Basra to Iraqi forces in the autumn - the remaining province where Britain has responsibility.
He is due to make a statement to Parliament on future strategy in October, after studying the widely anticipated critical progress report to be delivered by the U.S. commander in Iraq, Gen. David Petraeus.