The draft law, under which those troops would withdraw by the end of July, was rejected because lawmakers objected to it being in the form of legislation, rather than an agreement, as was the deal Iraq signed with the United States, said Hussein al-Falluji, a member of the Sunni Accordance Front.
"Legally, relations between two countries cannot be organized by a law. They should be arranged, according to international law, through treaties or agreements," said al-Falluji. "For this reason parliament rejected this law. It was a big mistake by the government."
Both the law governing the British presence and the security pact allowing the 140,000 U.S. soldiers in the country to remain three more years replace a UN mandate that expires on December 31.
"What the parliament did today, rejecting the bill, was a great national achievement," said Nassir al-Issawi, a lawmaker loyal to anti-American Shi'ite cleric Muqtada al-Sadr, who wants an immediate end to what he sees as a foreign occupation. "We believe that British forces and all other forces should pack their things," said Issawi.
No comment was immediately available from the government.
The rejected law covered the future of troops from Britain, Australia, Romania, Estonia, El Salvador, and NATO in Iraq, where violence is dropping and foreign troops are increasingly handing over security to local forces.
British Prime Minister Gordon Brown said this week that a reserve component of around 400 British soldiers, compared to 4,100 now, would remain to train Iraqi naval forces in the south after July.
The U.S.-Iraqi security pact sets a withdrawal date for the U.S. troops in Iraq at the end of 2011 and gradually restricts U.S. activities more than five years after the U.S.-led invasion to topple Saddam Hussein.