In an interview with CNN's "Late Edition," Reid said neither Britain nor the United States had "imperialist ambitions" in Iraq and wanted the country's own forces to take over responsibility for security.
Reid made the remarks when asked to comment on a leaked British government memorandum that states Britain is considering cutting its troop presence to 3000 from 8500 by the middle of 2006.
No imperialist ambitions
The memo, first published in a British newspaper last week and signed by Reid, also says there is a "strong US military desire for significant force reductions".
Reid declined to comment directly on the memo but confirmed Britain's strategic plan was to transfer security responsibility to Iraqi soldiers.
"If we had an open-ended presence there, and were never envisaging that the Iraqis could take control of their own country, we would be rightly criticized for long-term imperialist ambitions. We have none," Reid told CNN's Late Edition program.
There are 8500 British troops in
"Therefore we look forward to the day that the Iraqis build up their own security forces, commensurate with taking control, as they are of their own democratic processes, in order that they can initially take the lead and we can then give them support, but gradually run down our presence there," he added.
"Now that is not going to be an event. That will be a process. I believe it is a process that could start, no more than that, over the next 12 months."
The British government has long declined to set a timetable for withdrawing British troops from Iraq, fearing doing so would give heart to fighters there.
Reid noted that the Iraq already had 170,000 trained troops and that it would be a phased hand over.
"What we have to envisage is a transitional hand over, over a period of time, so that the Iraqis themselves ... can gradually take control of their own security and counterterrorism," he said.
"But we will not be going unless and until they are in a position to do that. It will be a conditional withdrawal, not set according to any immutable timescale," Reid added.
"And the conditions as they are met will allow us to hand over to the people who should have the democratic control in Iraq, and that is the Iraqis themselves."
Ninety-two British servicemen have died since the Iraq war started in March 2003.
Britain has about 8500 troops in Iraq, mostly in the generally peaceful Shia south, where support for the Shia-led government in Baghdad is stronger.