Officials said the review is looking at which projects will be of most benefit to the population. Some contractors say a number of planned projects have already been cancelled and complain that a power struggle in Washington between the two departments is affecting progress in Iraq.

Under a new structure the PMO’s operations have been divided between IRMO and the project and contracting office (PCO). IRMO, which is run by the State Department, has responsibility for setting the IIRP priorities, while the PCO, which is run by the DoD, is responsible for implementing projects under the programme.

In a further change, PMO director David Nash is stepping down as head of the IIRP. In early October, Bill Taylor will take over at IRMO. Taylor was previously responsible for co-ordinating US assistance to Afghanistan and, prior to that, co-ordinating Washington’s assistance programme to Eastern Europe and central Asia. Nash will also be replaced as PCO head, by an as yet unnamed official.