Quoting the Treasury, the Financial Times on Friday reported that the cost of fighting in Iraq was 850 million pounds ($1500 million) in the year to the end of March, shortly after the US-led invasion to topple former Iraqi president Saddam Hussein began.


A further 1.23 billion pounds ($2.10 billion) has been spent in the current financial year, the newspaper reported.


According to The Financial Times the three billion pounds ($ 5.2 billion) set aside to cover the costs of fighting Iraq will, at this rate, run out in the first half of 2004.


It has been estimated that Britain's continuing peace-keeping presence in Iraq is costing between 100 million and 200 million pounds a month ($172 million and $343 million), it said.


Britain has about 10,000 troops in Iraq, most of them in the south of the country.