Britain's army chief General Sir Richard Dannatt today returned a historic Union Jack flag to his Malaysian counterpart, General Muhammed Ismail Jamaluddin.

"It's a very historic flag and it seems that its proper home is to be in this country in the safekeeping of the Malaysian authorities," Dannatt said.

British forces and a Malaysian official had hoisted the flag in Selangor on September 9, 1945, after Japanese occupying forces in Malaya surrendered at the end of World War II.

Malaysia, a former British colony, gave the flag to Britain in 2005.

The handing over of the flag was preceded by a colourful ceremony in which Malaysian armed forces sang songs, played bagpipes and cut a festive yellow glutinous rice cake as Dannatt looked on.

"It is our hope that your visit to Malaysia will further strengthen bilateral cooperation and relationship, not only between the two armies, but between our nations," Muhammad Ismail told Dannatt in a speech.

Malaysia gained independence from Britain in 1957, but they retain ties on a number of levels, including through membership of the Five Power Defence Arrangements group which also includes Singapore, Australia and New Zealand.

British forces to stay in Iraq

Dannatt also said British forces would remain in Iraq until their mission was completed, despite a planned withdrawal of 1,600 troops.

Prime Minister Tony Blair announced last week that the number of British troops in Iraq would be reduced from 7,100 to 5,500 in the coming months.

Dannatt, on an official visit to Malaysia, said the plan would proceed but did not set out a precise timetable for a complete withdrawal.

"We are following the plan that our government laid down, and as was announced in London, we'll be withdrawing the first 1,500 or so in the course of the next two or three months," Dannatt told reporters.

"But we've got to stay there until we've completed the mission, so that may take some time," he said.

Blair said further reductions were likely that would reduce Britain's presence to less than 5,000 soldiers, but said troops would stay around the southern Iraqi city of Basra into 2008.