British troops should begin their pullout from Iraq by March 2009, according to a senior defence source.
Britain has more than 4000 troops in Basra and plans to withdraw them if Iraq elections pass off peacefully on 31 January.
Prime Minister Gordon Brown has indicated that almost all British troops should be out of Iraq by the middle of 2009, the BBC reports.
The evenutal withdrawal of all but a few hundred British forces, who may remain to continue training Iraqi security forces, should free up more helicopters and intelligence assets for the campaign in Afghanistan.
Defence sources say the Taliban have been quick to adapt their tactics, with increased use of improvised explosive devices.
The United States is planning a big increase in forces in Afganistan in the new year and it is hoping that its Nato allies will follow suit.
Former British Prime Minister Tony Blair was US President George W Bush's strongest ally over the March 2003 invasion of Iraq to topple Saddam Hussein.
Mr Blair sent 45,000 troops to join the US-led military action but the war cost him public support.
Mr Brown, who took over from Mr Blair in June last year, has reduced British troop levels in Iraq and bringing most of the remaining troops home could give him a boost at the next election, due by mid-2010.
On Tuesday, US General David Petraeus said violence in Iraq in the past few weeks had fallen to its lowest level since mid-2003 and that security gains, while still at risk of reversal, were less fragile than before.