Britain sent about 40,000 troops to Iraq in the U.S.-led invasion in March 2003, but has begun drawing down troops in the port city, where only about 5,500 remain.

The International Crisis Group said in a report the city has slipped into "the systematic misuse of official institutions, political assassinations, tribal vendettas, neighborhood vigilantism and enforcement of social mores, together with the rise of criminal mafias that increasingly intermingle with political actors," the Post said.

Much of the crime is linked to three rival Shiite Muslim militias vying for control of neighborhoods and revenue from the oil industry, analysts told the newspaper.

As an example, an airport base outside the city where a regional U.S. Embassy office and Britain's remaining troops are barricaded has been hit by some 600 mortar or rocket shells in the past four months, the report said.