The Scots Guards will be the first British troops in action inside Basra if the UK's desperate attempts to stay out of the stalled Iraqi government offensive in the southern city fails, the Herald can reveal.

The 500 men of the Scottish battalion would be used to spearhead any intervention, with their Warrior armoured vehicles providing a combination of protection for the infantry and firepower from their turret-mounted Rarden cannon and chain-guns.

The SG are one of four infantry units stationed at the UK's airport base south-west of the city and, with the Challenger 2 tanks of the Royal Dragoon Guards, form the leading battlegroup.

The other garrison troops on standby include the Royal Scots Borderers (1st battalion, Royal Regiment of Scotland) and the 1st battalions of the Mercian and Duke of Lancaster's regiments. All are due to return home by late spring after six-month tours as part of 4th Armoured Brigade.

British artillery on the sprawling Contingency Operating Base (COB) five miles from Basra's outskirts opened fire at the request of the Iraqi authorities on Saturday to destroy a Mehdi Army militia mortar team in the northern al Hala district of the city. The Ministry of Defence also confirmed that two tonnes of water and rations have been supplied by the British to Iraqi troops fighting militiamen in the maze of alleyways in the slum districts which are the Mehdi Army's strongholds.

Iraqi military helicopters and a transport aircraft flying in ammunition and medical supplies have also been unloaded and refuelled by RAF personnel at the UK base.

The Pentagon has meanwhile confirmed that US special forces are operating in Basra for the first time since 2003, embedded with the Iraqi units to call in airstrikes and identify targets.

Despite the commitment of almost 30,000 government troops and police, what was supposed to be a 48-hour operation launched last Tuesday has been thwarted by heavy militia resistance and is no closer to breaking the hold of the Mehdi Army on the southern oil capital.

There are now fears in Whitehall that Iraqi Prime Minister Nouri al Maliki could call on Britain to abandon its "overwatch" posture and send in the Scots Guards to break the impasse in the maze of narrow, militia-controlled alleyways.

Direct intervention would make the static UK garrison a major focus for Mehdi Army attack and run the risk of heavy British casualties in street fighting.

An upsurge in violence would also wipe out any chance of meeting Gordon Brown's pledge to reduce the UK presence from its current 4100 troops to 2500 by the summer.

Defence Secretary Des Browne is expected to tell MPs this week that a reduction in troop strength will have to be delayed because of the security situation.

Major Tom Holloway, the British spokesman in southern Iraq, said yesterday: "This is essentially an Iraqi-led and planned operation. Our mission here is one of support and has been since Provincial Iraqi Control took place in December. That's not just rhetoric, the Iraqis really are responsible for security here. What we have been doing for the last few months is providing training and support to the Iraqi Army. The particular focus has been on fighting in built-up areas and the reasons are obvious.

"In terms of this operation itself, we are providing niche capabilities the Iraqi armed forces don't yet possess, particularly fast air, and we have had 24-hour air cover over the city for the last four days providing surveillance which is being fed into the Iraqi operations centre inside the centre of Basra."

That centre came under attack from mortars and rockets on Saturday, underlining the militia's continuing resistance and ability to move freely.

Sources say the troops leading the Iraqi offensive have been drafted in from Baghdad and are not familiar with the layout of Basra's streets, whereas the alleyways are the Mehdi Army's "battlespace of choice".

Military observers also say the Iraqi planning and intelligence for the operation has been flawed from the start.

The need to call in US advisers and British artillery raises questions about the Iraqi Army's ability to wage a successful campaign on its own. Witnesses say large parts of Basra - perhaps as much as 50% to 70% - are still controlled by Shi'ite militias.

US jets have dropped two precision-guided bombs and carried out strafing runs against militia positions so far, with RAF aircraft flying surveillance sorties to identify targets.

There are conflicting accounts of one incident in Basra's Hananiyah district, where two women and a child were reportedly among eight civilians killed by an air strike.

Iraqi police claimed a US aircraft had carried out the strike, but British jets were also seen in the area.

An Iraqi army battalion commander and two of his bodyguards were killed on Saturday night by a roadside bomb in central Basra, a military spokesman said.