In an address to the House of Commons, Blair said that 1,600 British troops will come out of Iraq "in the coming months," as Iraqi security forces take on more responsibility.
The United Kingdom's combat capability in Iraq will not be diminished, he said, and the remaining British forces will focus on training Iraqi forces and securing the Iranian border and supply routes.
Over time and depending on the progress of Iraqi security forces, Britain will be able to draw down further, possibly to below 5,000 troops once the base at Basra Palace has been transferred to the Iraqis in late summer, Blair said.
"The U.K. military presence will continue into 2008, for as long as we are wanted and have a job to do," he said. "Increasingly our role will be support and training, and our numbers will be able to reduce accordingly."
At the Pentagon, Bryan Whitman, a Defense Department spokesman, said Blair's announcement was expected, and that the decrease in British troops has been planned for some months.
"You know, Basra is not Baghdad, and in Basra, the British have turned over a lot of responsibilities for the region to Iraqi security forces," Whitman said. "Even with their planned drawdown, they will still have a significant presence that will be doing a number of things."
Whitman noted that many countries still support the coalition efforts in Iraq and Afghanistan, whether through providing troops or financial, diplomatic or legal support. It is up to each country to decide what their participation will be, he stressed.
"I think that the world's democracies understand the importance of continuing to take the fight to the terrorists, and we see that in the participation of many nations in both Afghanistan and Iraq," Whitman said.
In an interview today with Jonathan Karl of ABC News, Vice President Dick Cheney said Britain's decision to withdraw forces is proof that operations are succeeding in some areas of Iraq.
"I look at it, and what I see is an affirmation of the fact that there are parts of Iraq where things are going pretty well," Cheney said. "The focus that we've had, obviously, is Baghdad and the decision the president made to surge troops into Baghdad."