British troops could hand over control of the Iraqi town of Basra by next spring, the foreign secretary has announced.
Margaret Beckett said progress in the country, where about 7,000 British troops are deployed, "gives us confidence" that Iraqi forces could take over in the southern city.
Her comments in the House of Commons this lunchtime represent the first real indication from the government of a timetable for pulling troops out of Iraq.
However, she repeated Tony Blair's insistence that there was no question of "cutting and running" and said Britain must "continue to hold our nerve".
And a Foreign Office spokesman stressed her comment did not represent any change in policy, telling politics.co.uk it was just an "indication of the way we think the process of handover is moving".
Opening the Queen's speech debate on foreign affairs, Ms Beckett told MPs that with the transfer of Najaf in December and Maysan, where some UK troops are based, in January, the process of handing over control to the Iraqi forces was "well underway".
She added: "The progress of our current operation in Basra gives us confidence that we may be able to achieve transition in that province at some point next spring."
It is not yet known how many troops would leave the city or whether any would come home as a result of the handover. The Foreign Office said British forces could remain as an "overwatch" presence to help Iraqi troops if they get into difficulties.
There are currently about 300,000 trained Iraqi troops and police, and Tony Blair said last week that their capabilities were increasing. They are currently leading operation Sinbad, a security operation in Basra, with the British giving assistance.
The Foreign Office spokesman said of today's announcement: "What that doesn't mean is that all troops will be out by next spring. It's all based around what the conditions will be on the ground."
Shadow foreign secretary William Hague told BBC News 24 the announcement was "very welcome if it can be believed and if it can be lived up to".
But Liberal Democrat leader Menzies Campbell said Ms Beckett's lack of detail showed the government still had little idea of its strategy. He has recently begun calling for a phased withdrawal from Iraq.
"Mrs Beckett's comments are notable as much for what she doesn't say as for what she does," he said, adding: "The government's position remains of having neither a strategy for staying or for going."