TONY Blair's policy on Iraq suffered a devastating blow last night when the head of the Army called for the withdrawal of British troops "soon" and claimed their presence in the country was making security problems worse.

General Sir Richard Dannatt said: "I don't say that the difficulties we are experiencing round the world are caused by our presence in Iraq, but undoubtedly our presence in Iraq exacerbates them."

The Army chief argued we should "get ourselves out sometime soon because our presence exacerbates the security problems".

Gen Dannatt, who only became Chief of the General Staff in August, has placed his job on the line and it will be hard to see how he can continue in it. A meeting with Des Browne, Defence Secretary, is expected today.

Ministers were said to have been taken completely by surprise by the general's remarks. Last night, the Ministry of Defence was putting a brave face on a crisis at the heart of government.

A spokesman said: "We have a clear strategy in Iraq. We are there with our international partners in support of the democratically elected government of Iraq under a clear UN mandate."

But shockwaves reverberated around Westminster.

Sir Menzies Campbell, the Liberal Democrat leader, claimed government policy on Iraq was "collapsing" while Nick Harvey, the party's defence spokesman, said the general's opinion "drives a coach and horses through the government's foreign policy".

Liam Fox, Shadow Defence Secretary, described Gen Dannatt's words as the "strongest challenge" the government had faced for some time. Anti-war campaigners seized on the Army chief's views. Rose Gentle, from Glasgow, whose soldier son Gordon was killed in Iraq two years ago, said she was overjoyed to hear Sir Richard's comments.

Mr Blair has repeatedly insisted that the British presence in Iraq is morally right, that there will be no cut and run, and that it has had no effect on security at home.

However, Gen Dannatt branded a "naive" failure the PM's desire to forge a "liberal democracy" and he said that history would show the initial postwar planning was "poor".

He added: "We are in a Muslim country and Muslims' views of foreigners in their country are quite clear. As a foreigner, you can be welcomed by being invited into a country, but we weren't invited, certainly not by those in Iraq at the time.

"The military campaign we fought in 2003 effectively kicked the door in. Whatever consent we may have had in the first place, may have turned to tolerance but has largely turned to intolerance."

The general said that he had "more optimism" that Britain "can get it right in Afghanistan".