Britain's finance minister Gordon Brown said he hoped to see troop reductions 'in the next few months' and announced extra reconstruction aid during a visit to Basra in southern Iraq on Saturday.
Brown was visiting British troops and holding talks with figures including Deputy Prime Minister Barham Salih during a day-long trip, his first to the troubled nation.
Announcing 100 million pounds (147 million euros, 188 million dollars) of aid over the next three years, he added: "We have got to help the Iraqi economy get back on its feet so that we can see Iraq running its own affairs and we can see a reduction in our troops in the next few months."
The visit came amid controversy after Prime Minister Tony Blair, who Brown is expected to succeed next year, appeared to agree with interviewer Sir David Frost's comment that action in Iraq had been a "disaster".
Downing Street, Blair's office, dismissed the incident on Saturday as a "straightforward slip of the tongue".
Britain has 7,000 troops based in southern Iraq.