Gordon Brown paved the way for the complete withdrawal of British troops from Iraq before the end of next year yesterday as he announced plans to halve the number of British troops in Iraq from next spring.

In a long-awaited statement in the House of Commons yesterday, the Prime Minister, battling to restore his dented authority, explained that the first stage of troop withdrawal had begun.

The statement came as the PM sought to regain the political initiative after his humiliating decision not to go to the country after allowing speculation about a snap election to grow.

Speaking at a televised Downing Street press briefing earlier, Mr Brown came close to apologising for the retreat after he admitted he may have delayed too long in announcing his decision.

Later, Mr Brown received a more sympathetic reception from Labour MPs and peers at the regular meeting of the Parliamentary Labour Party in the Commons as he sought to draw a line under the election controversy.

Mr Brown had made his statement on Iraq amid boisterous scenes in the Commons.

He said: "With the Iraqis already assuming greater security responsibility, we expect to establish Provincial Iraqi Control in Basra province in the next two months as announced by the Prime Minister of Iraq."

He added they would "move to the first stage of overwatch'; reduce numbers in southern Iraq from this summer's 5500 to 4500 immediately after Provincial Iraqi Control, and then to 4000".

"Then in the second stage of overwatch' from the spring - and guided as always by the advice of military commanders - we will reduce to around 2500 troops, with a further decision about the next phase made then," he said. Des Browne, the Defence Secretary, refused to be drawn on the long term prospects but earlier Whitehall officials admitted that all British troops could be brought home.

"Certainly at this stage there is no guarantee that they are going to be there beyond the end of 2008. The policy will be made in the spring," he said.

In a packed Commons, against a backdrop of noisy protesters in Parliament Square, Mr Brown set out a number of measures designed to ease the transfer of power in Iraq while silencing the government's critics in the UK.

l Local staff, who have worked for British forces for more than 12 months in Iraq would be able to apply for financial aid to settle there, elsewhere in the region or "in agreed circumstances" in the UK; l There are plans to allow professional staff, including interpreters and translators, with a similar length of service who have left British employment since the beginning of 2005 to apply for help. Further details of the scheme will be announced later this week; l Orders had been placed for an additional 140 Mastiff patrol vehicles which Mr Brown described as offering the "best known protection against mines and roadside bombs"; l Additional funding for troops in Iraq and Afghanistan to double the number of internet terminals and provide free wireless internet connections.

Mr Brown appeared in the Commons after taking a battering in the media over a series of blunders, beginning in Iraq last week during the Tory party conference, when he announced the withdrawal of 1000 troops by Christmas.

In the Commons, David Cameron accused Mr Brown of spinning and playing politics with Britain's servicemen. While he welcomed the prospect of troop reductions and help for Iraqis who had worked with UK forces, he asked Mr Brown if "on reflection" he agreed the way announcements on troop reductions had been made were "mistakes".

Mr Cameron reminded the Prime Minister that he had promised to make any important announcements to the Commons.

"But you didn't. You promised a thousand of our troops would be brought back before Christmas but isn't it the case that 500 of them had already been announced and 270 of them were already back in the country? I have to say to you this is of a different order of magnitude to what we've had from you over the last decade," he said.

Sir Menzies Campbell, the leader of the Liberal Democrats, said it was time for Mr Brown to set a framework "for the complete withdrawal" of British forces from Iraq.

"After four and a half years Britain has more than fulfilled any moral obligation to the people of Iraq and our obligation now is to our young men and young women in our armed forces?" he said.