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As the 2nd Battalion of the Royal Anglians prepared to set out on patrol through central Basra yesterday, risking mortar attack and possibly more, all the talk was of their boss's suggestion that they were making the situation worse.

General Sir Richard Dannatt's comments that the British military presence in southern Iraq "exacerbates the security problems" and that they should get out "sometime soon" was met with a mix of frustration and quiet agreement in the heavily fortified Palace compound, a former Saddam palace in southern Basra that now houses the consulate as well as 1,200 coalition troops.

"I can't believe they are saying these things," one embassy official said. "This whole thing is to do with politics and Tony Blair. It's not about what is happening on the ground here, but what is happening there."

Three and a half years after British forces, in the general's words, "effectively kicked the door in" to southern Iraq, many squaddies still believe they are making a difference, and that if they were to withdraw now there would be a messy collapse into open civil war.

Inside the army base yesterday, a tall, thin, 20-something private was preparing his Warrior for a patrol into the city centre. His camouflaged uniform has long since faded under the scorching sun, and his flak jacket was covered with grease. The private, who has been in Iraq for five months, and has a few weeks to go before being relieved, was unimpressed by the general's comments. "He's just saying this because he wants to take us to another fucking war, in Afghanistan or somewhere else," he said. "He doesn't care."

The extent of the deterioration of the security situation in the south of Iraq, however, is unmistakable. Eighteen months ago, when I was last embedded in Basra, the British army still patrolled in berets and without flak jackets. Today they will only emerge in heavily armoured Warrior vehicles, wearing heavy-duty helmets with protective screens across their faces, and body armour to cover their shoulders and upper arms.

Where the army once was able to patrol around the city relatively freely, they now know there are certain parts of it where they will be vulnerable to attack. Patrols often involve a visit close to a Sunni mosque, just to reassure worshippers that the forces are there.

Part of the difficulty is identifying the enemy. Basra has become riddled with organised gangs, militias and death squads, and its police force is corrupt. According to senior coalition advisers, there are around 20 different security and police groups in the city, ranging from the directorate of education police to the justice police; the governor alone has 200 armed gunmen protecting him. Some of the police units are active in organised crime and have been infiltrated by militias, others work as death squads. There are also around a dozen religious militias.

"We are in a tribal society in Basra and we [the British army] are in effect one of these tribes," said Lt Col Simon Brown, commander of the 2nd Battalion. "As long as we are here the others will attack us because we are the most influential tribe. We cramp their style."

He can see the general's point. "There is so much poverty and frustration in the streets of Basra, as long as you are in the street, someone will shoot at you. We complicate the situation. We give the disaffected and frustrated a chance to empty their frustrations by shooting at us."

One recent episode illustrates this. A military base in Amara called Abomaji had been held by the British for months, attracting heavy mortar attack. In late August it was handed to the Iraqi army; within 48 hours, according to the commander of the unit, everything on the base had been looted. The decision was taken to set up a mobile base in the desert, shifting position every 48 to 72 hours. Staying in one place to be shot at, it would seem, wasn't worth the trouble.

"We cannot substantially influence the situation. Our powers are diminishing," said a British civilian contractor attached to the British embassy. "The army is holding the ring and they are buying us and the Iraqis time, but the talk of the troops is misleading. There can't be a military solution to what is happening in Iraq."

In the sweltering back seat of a Warrior, sweat running down his face, 2nd Lt Matt Lamber said he couldn't afford to get distracted by the general's comments. "I try not to think of that. I try to look at the smaller picture of what we are doing, and enjoy the small victories on the ground, the bad guys we arrest."

On unofficial military web forums, meanwhile, other soldiers were more willing to speak out in support of Sir Richard. "A man in the right position saying the right things NOW," one soldier serving in Iraq wrote on the British Army Rumour Service website. "We should be happy to have such a man in place who is on side and supports the army."

Another wrote: "The most impressive comments I have heard from someone of his seniority for a long time."

A third added: "I am thoroughly heartened by this and have the beginnings of a thaw in the cynicism which has dogged my service thinking since 2003."

An internet poll conducted by the website showed overwhelming support for the general, with 76% saying he had been "absolutely right" and 16% saying he was right from a military point of view. Just 2% said he had been "rather wrong".

But one soldier calling himself Merkator criticised Sir Richard's media appearances, which followed his newspaper interview yesterday. He said: "You claim to be standing up for the men and women that serve under you, but your backtracking this morning has dispelled that notion."

· Additional reporting by Matthew Taylor.
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