Ministers and military officials are in negotiations with their American counterparts over the British contribution to the long-term effort to maintain peace and stability in post-Saddam Iraq once the country is handed over to its newly elected government.

The scale of the commitment is yet to be formally agreed, but defence sources confirmed that it could see the UK maintaining a military base in south Iraq, near Basra, which it currently controls, for years to come.

The news of the potential extended military posting in one of the world's most dangerous trouble spots came as a commander admitted that British soldiers preparing to deploy to lawless southern Afghanistan were "apprehensive" about the threats they will face.

The Americans, who have yet to formally admit to concrete plans for long-term military bases in Iraq once the new government has been established, are expected to maintain at least one, much larger, facility near Baghdad. Critics claim the negotiations are part of a long-term plan to maintain US control over Iraq and its oil reserves, and to establish a valuable permanent presence in the Middle East.

Details of the behind-the-scenes planning for the next phase of the Iraq operation emerged amid escalating speculation that Coalition forces were on the verge of a significant reduction in the thousands of troops currently occupying Iraq.

In the week that the death toll among UK troops in the country passed 100, Foreign Secretary Jack Straw predicted "good news" regarding the 8,000-strong force later this year. Reports from Tokyo later claimed that Japan had agreed to drastically reduce its presence in Iraq during the first half of this year, along with Britain, America and Australia, following a summit meeting in London last month.

The MoD confirmed that the government still hopes to begin a significant withdrawal this year, although the 4,000 leaving by May quoted in some reports is seen as far too optimistic as the insurgency continues to disrupt everyday life in the British zone. Military planners foresee a phased "return to barracks" as a preliminary to a gradual reduction of forces during the year.

But even after significant numbers of troops have finally left Iraq, Britain will retain a presence. One senior defence source confirmed that negotiations with the Americans are ongoing, and that the MoD is actively considering the option of withdrawing to a "non-urban location", which could be termed as a base or a "training facility" with space for hundreds of troops.

Sir Tim Garden, a former assistant chief of the defence staff, said he expected the British and Americans to remain in Iraq for many years. But he warned that the government would be "foolish" to formalise its commitment into a full-scale military base.

Brigadier Ed Butler, commander of 16 Air Assault Brigade, which is preparing to deploy to Afghanistan, said his troops were "apprehensive", but well trained, equipped and prepared for the task ahead of them - and he was confident that they had the capability to "operate freely" in Helmand province.