The southern Iraqi city of Basra will be shortly under the control of Iraqi security forces after the remaining 500 British soldiers began withdrawing from their base late Sunday.

Basra Palace, the former residence of dictator Saddam Hussein served as base for the British soldiers since April 2003. Armored vehicles and helicopters were seen leaving Basra during the early hours of Monday, an Iraqi army official saying the pullout has been completed before dawn.

In fact, the troops were transferred to a base on the city’s outskirts, but many believe this could be the beginning of a complete withdrawal from Iraq. Iraqi forces will be in charge of the port’s security, while the foreign troops have the role of providing assistance if needed.

The move has already sparked controversy, media from the United States along with officials saying the withdrawal is a clear sign of the British forces’ failure. American analysts and several officials said the troops left Iraq’s main port and second-largest city in the hands of Shiite militias.

The Bush administration hoped Britain will keep its troops in Basra at least until US top officials in Iraq present their report on the country’s security and political situation to the Congress this month.

Britain’s Prime Minister Gordon Brown said Monday the operation has been “pre-planned” and does not represent a defeat as speculated.

“Let me make this very clear. This is a pre-planned, organized move,” the premier said after being asked whether the pullout may be interpreted as a defeat or a retreat.

“This is essentially a move from where we were in a combat role in four provinces, and now we are moving over time to being in an overwatch role,” Brown said.

The British government decided to make this step after insurgents began attacking military convoys transporting supplies to Basra. About 5,500 troops from the United Kingdom remain in Iraq, a considerable drop compared to the 7,500 servicemen deployed after the 2003 invasion.

Basra is one of the most important cities in Iraq due to the substantial petroleum resources found in the region and the adjacency to the Persian Gulf.