Tony Blair has said the operation to allow Iraqis to take the lead in frontline security in Basra had been "completed" and "successful".
Asked about reports he would announce cuts to UK troops in Iraq, he told the BBC's Sunday AM: "Let's wait and see."
The operation was intended to put Iraqi forces in "the main frontline control of security within the city", he said.
UK troops are still heavily involved in Basra but increasingly in a supporting role, with Iraqis taking the lead.
The idea had always been to scale down UK troop numbers as Iraqis "scaled up" their capabilities in terms of security and policing, he said.
Foreign Secretary Margaret Beckett told MPs last month that the prime minister would make a statement to the House of Commons when the operation was completed.
During that Commons debate on Iraq she said the operation was going well, but did not put any timescale on its conclusion beyond saying this "spring".
Defence sources have said the plan was to hand over frontline security to Iraqi forces and then withdraw UK forces to a base outside Basra.
There has been speculation their numbers could be as much as halved, although Mrs Beckett said it would be up to military chiefs to decide how many would be needed to be kept to support the Iraqi forces.
And Mr Blair urged caution over Sunday newspaper reports that UK troop numbers in Iraq could be halved.
But he said: "It is absolutely true, as we have said for months, that as the Iraqis are more capable down in Basra of taking control of their own security we will scale down.
"But you've got to make sure you have sufficient forces in support and in reserve to be able to help the Iraqis if a particular problem arises."
He added: "The issue is the operation that we have been conducting in Basra is now complete and that operation has specifically been to put the Iraqi forces in the main frontline control of security within the city.
"It's actually been successful as an operation and as a result of that there's reconstruction that's come in behind it and we've been able to make real progress."
Asked if the Americans, who are sending in extra troops, were "entirely happy" with the UK's plans, Mr Blair said they were.
He said the situation was different in the two different areas, with no Sunni insurgency or al-Qaeda suicide attacks in the Basra area.
He also said sectarian violence in Basra had fallen "enormously", and the number of murders had fallen to 30 in December.
He added: "As we go through the city and we are able to put in reconstruction money and development money there's a lot of change going on there.
"It will still be a tough thing to do and the Iraqi forces will be taking on these extremists for a long time to come but on the other hand there is real progress and we don't want to get in the way of that progress."
During the interview the prime minister rejected suggestions he should bear responsibility for ongoing violence in Iraq, although he said he felt a "deep sense of responsibility" for bringing it to an end.
He said sectarian tensions and violence were not created by "some planning error" by the coalition.
"Of course I am devastated by the numbers of people who have died in Iraq, but it's not British and American troops that are killing them.
"They are being killed by people who are deliberately using terrorism to try to stop the country getting on its feet.
"It's not a question of being culpable. I feel a deep sense of responsibility for putting the situation right."