The British Government is to end permanent staffing at its consulate in Iraq’s southern city of Basrah.

Diplomats and trade officials will fly down to Baghdad when needed and the embassy in the Iraqi capital will be built up.

But British business leaders are worried the closure will send the wrong signal to Baghdad as they battle to win major contracts against companies from the Far East including South Korea and China.

UK bosses are worried the move means Britain will lose vital relationships with Iraq – especially in the south where there is so much goodwill towards UK companies.

Executive Chairman of the Iraq Britain Business Council, Baroness Nicholson said: “British business presence down in Basrah is absolutely critical.

“I hope this is a step sideways and not a step backwards.

“I don’t think that’s a Foreign Office decision. I think it is something that is done from the Treasury.

“I’m very hopeful the Foreign Office cuts, which I think should not have happened and should not be affecting Basrah may be reversed before too long.”

IBBC has recently expanded its operation in Basrah, opening a new office in July and is soon to sign an memorandum of understanding with the Basrah governorate

Full interview at: http://news.bbc.co.uk/today/hi/today/newsid_9760000/9760240.stm