Iraqis will have the "final say" over whether US and UK forces remain after the handover of power on 30 June, Foreign Secretary Jack Straw has said.
Mr Straw wants a greater role for the UN
He told BBC News Online the plan was for a "multi-national force" to stay on after the handover of power to Iraqis.
But a "final decision has not been made" on whether it will continue to be commanded by a US general, he said.
He said Iraq's government would have the power to decide whether "foreign forces should be on their soil".
Mr Straw was answering questions from across the world on the BBCs interactive Talking Point programme.
He revealed that US Secretary of State Colin Powell was "an avid fan of BBC programmes"
"He noticed he could email me on this programme....He had been thinking about it, but decided otherwise," said Mr Straw.
The foreign secretary said the precise arrangements for the power handover had yet to be worked out.
"But everybody is clear that from the 30 June, you are going to have an Iraqi sovereign government to decide whether or not, along with other things, foreign forces should be on their soil. It is their sovereign decision."
He said "various models around the world", such as Korea or Afghanistan, were being studied as possible templates.
Tactical command would remain with coalition soldiers on the ground.
Mr Straw added: "In terms of wider military strategy, the overall approach and final decision...is ultimately a matter for the sovereign Iraq government."
Earlier, Tony Blair told MPs that Iraqis were "delighted" to have been freed from Saddam
Hussein and wanted coalition forces to leave as soon as possible.
He added: "We will not leave until the job is properly done and we have made sure the
wish of the Iraqis for a sovereign, stable democratic Iraq is delivered."
There have been fears the handover on 30 June would be largely symbolic, with the US and UK continuing to wield power behind the scenes.
But Mr Straw said he was pushing for a new UN resolution ahead of the handover, which would define the terms of Iraqi sovereignty.
"Among other things", this would "lay down a mandate for the multi-national force and that will include detail of the inter-relationship between command and control of the multi-national force and sovereign powers of a sovereign Iraqi government".
He said British troops would remain in Iraq, "under the aegis of international law".
But the UK was "concerned to see the widest possible United Nations role in Iraq".
Mr Straw's words echo French and EU calls for a UN resolution setting out the exact terms on which power will be transferred.
Meanwhile, Mr Straw joined Mr Blair in condemning the beheading of American Nick Berg, murdered apparently in revenge for the mistreatment of Iraqi prisoners in the hands of US.
He said there had been a "difficult environment" for reconstruction in Iraq for "some time". It had not been caused by recent evidence of abuse, he said, but "by the way terrorists and insurgents have been behaving".
"The terrorists and insurgents have been pretty indiscriminate about which overseas contractors they have sought to kidnap and to kill," he said.
That included people "from China, from Russia, from America and a number of other countries which did not support the military action in Iraq, as well as, obviously, those that did," he added.
He said the beheading was a "dreadful thing" to have happened and, like other attacks against contractors it was self-defeating, "because these people are there to help Iraq rebuild".
On whether Iraqis would regain control of their jails after the handover, Mr Straw said: "That will be a matter for the Iraqi government and plainly it will be for the Iraqi government to decide that."
Mr Straw said the abuse of Iraqi prisoners by US troops was a "very bad blot on our record which has to be dealt with".
But although it had been a "setback" for the coalition, which made it harder to "make the human rights case", last year's US-led invasion would eventually come to be seen as a "liberation".
"Democracy plainly does not mean torture. What democracy does mean is that where such abuses do take place, they are fully and properly investigated and the perpetrators are brought to justice," Mr Straw said.