Brown told Parliament he planned "from next spring, to reduce force numbers in southern Iraq to a figure of 2,500." Decisions about further cuts will be made once that reduction is complete, he said.
The announcement comes just six days after Brown said 1,000 British service members would come home from Iraq by the end of 2007. He made the statement during a surprise trip to Iraq to meet senior military and civilian leaders from Iraq, the U.S. and Britain.
He told lawmakers Monday, "this is the long term strategy for overwatch," referring to his government's plan to end combat duty for U.K. service members in Iraq, instead having them in training roles working with Iraqi nationals.
``We plan to move to a second stage of overwatch, where the coalition would maintain a more limited re-intervention capacity and where the main focus will be on training and mentoring,'' Brown said.
Around 500 British logistics and support staff will be moved outside Iraq, but in the Middle East region, to support the remaining troops, Brown said. Officials said they are likely to be based in Kuwait.
Iraqi interpreters or civilian staff employed by British forces for more than 12 months will be given financial aid to resettle, leave the country or be cleared ``in agreed circumstances, for admission to the U.K.,'' Brown said.
Britain has about 5,500 soldiers based mainly at an air base on the fringes of the southern city of Basra, Iraq's second-largest city, 340 miles southeast of Baghdad.
They vacated their last remaining downtown base in Basra in September, accelerating calls from the British public to drawdown some forces.
Meanwhile, an official Iraqi investigation into a deadly shooting involving Blackwater USA security guards has raised the number of Iraqis killed to 17. It also found the gunfire was unwarranted and amounted to a deliberate crime. It recommends those involved face trial.
The Blackwater guards are accused of opening fire on Iraqi civilians in a main square in Baghdad last month. The guards have said they came under fire first.
The incident has outraged Iraqis.
Separately, a joint U.S.-Iraqi commission has met for the first time to review American security operations after the shooting.
The commission, chaired by Iraqi Defense Minister Abdul-Qader al-Obeidi and U.S. Embassy Deputy Chief of Mission, Patricia A. Butenis, expressed "mutual commitment of the Iraqi government and the U.S. government to work together to evaluate issues of safety and security related to personal security detail operations in Iraq," the brief embassy statement said.
The commission is expected to issue recommendations to both Baghdad and Washington on improving Iraqi and U.S. security procedures, with the "goal of ensuring that personal security detail operations do not endanger public safety" and prevent similar incidents in the future.
The North Carolina-based security company contends its employees came under fire first, but the Iraqi government and witnesses have disputed that.
In other developments:
A separate case being investigated, involving U.S. troops, highlights the difficulty faced by all members of the American contingency in Iraq - military or contractor; knowing who to shoot at, and when.
When U.S. sentries fatally shot three guards near an Iraqi manned checkpoint south of Baghdad, they thought they were targeting enemy fighters planting roadside bombs, according to the American commander of the region.