US-led forces failed to prepare sufficiently for a deadly "insurgency" that flared up in the aftermath of the war, launched in March 2003, a report by the House of Commons' Defence Committee said.
In a wide-ranging assessment of operations in Iraq since the fall of Saddam Hussein, members of parliament heard evidence from experts and some even travelled twice to the country to see the situation for themselves.
They concluded that Iraq's government would want Britain's 8000-strong military presence to remain until its own police and army are up to speed.
"This may be a substantial period of time," the report warned.
"In light of the state of the insurgency and the condition of the Iraqi security forces ... it seems likely that British forces will be present in Iraq in broadly similar numbers to the current deployment into 2006," it said.
At the same time, the committee said it supports this commitment and believes that calls for a withdrawal of British forces are premature.
"Experience has taught us that if nation-building exercises, such as that in Iraq, are to succeed, they must have a serious commitment of time, energy, financial resources and political resolve," the committee said.
The report will make grim reading for the government of Prime Minister Tony Blair as it prepares for an expected election on 5 May.
Opposition to the war forced tens of thousands of people onto the streets of London on its second anniversary on Saturday, with many vowing to shun Blair in the polls.
"Experience has taught us that if nation-building exercises, such as that in Iraq, are to succeed, they must have a serious commitment of time, energy, financial resources and political resolve"
House of Commons's Defence Committee report
One father who lost his son, a military policeman, in Iraq has even pledged to stand against the prime minister in his northern constituency of Sedgefield due to his anger about the continuing bloodshed in Iraq.
"This isn't a publicity stunt, it's a serious, full-blown political campaign to take the fight to Tony Blair's doorstep," Reg Keys, 52, said.
Analysing the US-led forces' record in Iraq, the committee said "a series of mistakes and misjudgements" occured during the initial stages of the campaign, and not enough importance was attached to boosting Iraq's own police force.
"Only belatedly did the coalition begin building the Iraqi security forces," it said.
"Even then a bottom-up, numerically focused approach meant the Iraqi military, security and police did not develop in a well-coordinated manner."
Blair's popularity has been hit
hard by the situation in Iraq
The report also criticises the Coalition Provisional Authority for failing to secure small arms depots across Iraq. They have now become a key source for anti-US fighters to get explosive materials and heavy weapons.
And it said not enough planning was done to meet the reconstruction needs.
British forces were therefore asked to manage a range of tasks beyond what should normally be expected of military organisations, it said.
Despite describing January's elections as a "turning point" for Iraq, the committee said they had hoped it would deal a major blow to anti-US fighters. But deadly attacks have continued.
In addition, the report highlighted some areas of optimism and progress in Iraq, especially in British-controlled areas in the south of the country.