The BRITISH government has stepped in to assess the prospects for UK construction projects in Iraq after the US administration announced that it would stop funding infrastructure work.

President George W Bush revealed this week that he would not seek any further reconstruction funds for Iraq when he presents his budget request to Congress next month. The decision has led to fears that infrastructure projects could be scaled back or scrapped when the 拢10.6bn earmarked for reconstruction runs out next year.

As 好色先生TV went to press, the British embassy in Baghdad was in talks with the US project contracting office, which is responsible for letting construction contracts.

A spokesperson for UK Trade and Investment, a government agency, said: 鈥淭his is something we are discussing with the embassy in Baghdad, which is in talks with the contracting office. We are considering the implications of the US decision on British work in the region.鈥�

Several UK firms are active in Iraq, including Halcrow, Amec and Mott MacDonald. Peter Gammie, Halcrow鈥檚 chief executive, said: 鈥淚 am sure this decision will have some impact on us as the projects we are working on are under US-funded arrangements. This will obviously have an impact on reconstruction efforts. Where new funding will come from, I don鈥檛 know.鈥�

A senior source at Mott MacDonald said that although projects were not likely to suffer in the short term, the long-term future was less certain.

This will obviously have an impact on reconstruction. Where new funding will come from, I don鈥檛 know

Peter Gammie, chief executive, Halcrow

He said: 鈥淛une 2007, when the funding is expected to run out, is still some time away, so we can鈥檛 say what will happen. But at the moment there have been no short-term changes to our infrastructure programme.鈥�

Experts have estimated that the US decision will leave Iraq with unfinished infrastructure projects worth billions of dollars. Some work is funded by international agencies but the USA has provided most infrastructure funding.

The decision comes after the US government was forced to divert almost half the funds earmarked for reconstruction to fight the growing insurgency in the country. At least 拢1.4bn of infrastructure funding has been used to build up Iraq鈥檚 security forces.