Shiite militiamen from the Mahdi Army took over the police joint command center in Basra on Sunday after British soldiers withdrew from the facility and handed control to the Iraqi police, witnesses said.
Police left the building when the militiamen, loyal to anti-American cleric Muqtada al-Sadr, arrived, the witnesses said.
The British military disputed the reports, saying they had been in contact with the Iraqi general in charge of security in Basra, who has said the Mahdi Army was not there.
But the witnesses said the Mahdi Army emptied the building -- taking generators, computers, furniture and even cars, saying it was war booty -- and remained there in the early evening.
The British military had maintained a small number of soldiers at the command center to help train Iraqi police.
However, the British withdrew Saturday night "in the framework of the plan for the handover" of British positions in the city to Iraqi control, said British spokesman Maj. Matthew Bird.
Basra, Iraq's second largest city and a major oil hub, has seen frequent violence between Shiite militias vying for power, including assassinations of Iraqis and frequent attacks on British bases around the city.
Britain has withdrawn hundreds of troops from Iraq, leaving a force of around 5,500 based mainly on the fringes of Basra, 550 kilometers (340 miles) southeast of Baghdad.
Last Wednesday, former U.S. Army Gen. Jack Keane, who was vice chief of staff at the time the Iraq war was launched in 2003, said Britain has allowed deteriorating security in southern Iraq to get worse.
He warned that American troops may need to plug the gaps if Prime Minister Gordon Brown withdraws significant numbers of British soldiers.