Prime Minister Gordon Brown has ruled out setting a timetable for withdrawing UK troops from Iraq, saying it would undermine their "important job" there.
Writing to Lib Dem leader Sir Menzies Campbell, he said the military still had "clear obligations to discharge".
Foreign Secretary David Miliband said the UK forces' training and mentoring role was what was needed on the ground.
Sir Menzies said Mr Brown was "ignoring the reality" in Iraq and should accept that UK efforts there had failed.
Speaking on BBC News 24, he said: "What are we achieving politically for Iraq and what are we achieving militarily for ourselves?
"There are no legitimate or coherent answers to those questions."
The head of the Army, Gen Sir Richard Dannatt, echoed Mr Brown's comments in a speech in June which has only just been made public.
Gen Dannatt said British troops must prepare for a "generation of conflict" and continue to work for "some form of success" in Iraq.
In his letter, Mr Brown told Sir Menzies: "It is wrong to say that the continuing presence of UK forces in Iraq will achieve little, or that they are severely restricted in what they can do.
"UK forces in Basra continue to have the capability to strike against the militias and provide overall security.
"They will continue to work with the Iraqi authorities and security forces to get them to the point where they can assume full responsibility for security."
Mr Brown said he was determined that the UK's approach to Iraq would be based on fulfilling obligations to the Iraqi government, and to the United Nations.
He said setting an exit timetable for troops would "undermine" those obligations, "as well as hindering the task of our armed forces and increasing the risks they face".
"I will do nothing that puts at risk the ability of our armed forces, who have done and are doing a magnificent job, to accomplish their work," Mr Brown added.
Mr Miliband said: "We've been absolutely clear that the so-called overwatch functions, working on training and mentoring, on supply routes, on a latent capacity for intervention, are all important.
"It meets the situation that actually exists on the ground and I think that's the right way to fulfil our international obligations and the obligations to the Iraqi people."
There are about 5,500 British military personnel in Iraq, down from 18,000 in May 2003 at the end of combat operations.
But US officials have warned that UK troops are too thin on the ground.
Last week senior US military advisor Gen Jack Keane expressed "frustration" that the British were more focused on training Iraqi troops than controlling "deteriorating" security in Basra.
Mr Miliband insisted that decisions about operations in Basra would not be influenced by US opinion.
Sir Menzies said the level of casualties in Iraq and Afghanistan was now "unacceptable" and could not be justified on the grounds of maintaining "political solidarity" with the US.
Mr Brown's approach to Iraq was no different to that of Tony Blair, he added.
Mr Brown also defended the "integrity, bravery and intelligence" of military policy in Afghanistan, where 73 British soldiers have died since the start of operations in 2001.
He admitted operations involved "tough, dangerous and difficult tasks and terrain", but said: "The international community is united in its desire to prevent Afghanistan once again becoming a failed state."