Margaret Beckett last night condemned the “barbaric” attacks in Baghdad, in which more than 200 were killed.

Five cars packed with explosives were detonated in the predominately Shia district of Sadr city in the Iraqi capital yesterday, killing 202 people and wounding a further 252.

In apparent retaliation, ten mortar rounds were fired at Baghdad’s main Sunni mosque, the Abu Hanifa. One person was killed and others injured.

In a statement last night, the foreign secretary said: “I am saddened to hear of further barbaric acts of terrorism in Baghdad. My deepest sympathies go to the families and friends of those who lost their lives in these awful attacks.

“Such attacks only serve to show how little the terrorists have to offer the Iraqi people and the importance of building national reconciliation.”

In a show of unity, Iraqi president Jalal Talabani joined with his Sunni and Shia vice presidents to call for restraint. An indefinite curfew has been placed on Baghdad and the international airport has closed to commercial flights.

The attacks marked the worst day of violence in the Iraqi capital since the US-led invasion in 2003. They came just a day after Ms Beckett revealed Britain was planning to hand over control of the southern city of Basra to Iraqi forces next spring.

Ministry of Defence officials insisted the handover would be based on the conditions on the ground, but said enough progress had been made in building up Iraqi security forces for Britain to be “confident” that such a transition could take place.

However, last night Liberal Democrat foreign affairs spokesman Michael Moore warned the bomb attacks in Baghdad underlined “the perilous situation in Iraq”.

“Following yesterday’s UN report that over 3,700 civilians were killed there in October, the situation seems to be getting even worse,” he said.

“The current strategy in Iraq is failing. The government must now initiate a new strategy, based on a phased withdrawal of British troops.”