In a report released yesterday he called on the UN security council, which will discuss the report today, to "assist the governing council" and "confer legitimacy on the process" of transition to democracy laid out by the occupying powers.

British officials welcomed Mr Annan's comments, which came as the security situation in Iraq continues to deteriorate and the 25-member governing council remains divided on who should lead it.

"Our initial reading is that it is encouraging and we should be in a position to recommend it [today]," said one official.

A delegation from the council, many of whom are returned exiles drawn from disparate and often fractious religious and ethnic communities, will visit the UN today, and declare itself the sovereign representative of Iraq.

Mr Annan praised the occupying powers for having "deployed intensive efforts to build consensus around its evolving transition plan".

The report also opens the possibility of the US going back to the UN and seeking its help in policing Iraq at a time when public support for the occupation is waning.

With American troops being killed almost daily and the operation costing approximately $4bn a month, America is keen to share the financial and military costs. But it has had trouble persuading other countries, notably India, to provide soldiers to serve under anything but a UN mandate.

Mr Annan's report does not provide a blanket endorsement of the process so far.

The UN special representative, Brazilian diplomat Sergio Vieira de Mello, has stressed "the need to ensure Iraqi ownership of the political process".

He also called on the Americans to "devolve real authority to a broadly representative and self-selecting Iraqi leadership" while raising serious concerns about the security situation.

The report provides respite for the US and British governments, as questions about the legitimacy of their war plans and their failure to find weapons of mass destruction place both governments under domestic political pressure, with few international allies.

The report comes after a flurry of diplomatic activity from George Bush's administration, including a meeting between the president and Mr Annan, and talks between both national security adviser Condoleezza Rice and secretary of state Colin Powell, and security council diplomats.

The efforts reflect a growing sense within the administration that the international consensus it eschewed when going into Iraq will have to be established if it is to get out in the foreseeable future.