Amec, the British infrastructure project manager, is warning that much of the reconstruction work it has done in Iraq in the past 18 months could be wiped out if funding for programmes is scaled back.

The prediction comes a week after reports indicated that the White House would not seek additional funds for rebuilding the country once the $18.4bn agreed by Congress in autumn 2003 has been spent.

In mid-term election year, the Bush administration is working on its 2007 budget and is seeking to cut spending against the background of a growing deficit and the costs of hurricane relief and the Iraq conflict. Reconstruction in the country appears to be a casualty.

Bush has boasted of leaving Iraqi infrastructure in a better state than it was under Saddam. In March 2004 he talked of rebuilding the country so that 'a free Iraq can quickly gain economic independence'. He pointed to its oil wealth, saying it was producing 2 million barrels a day and to pledges of international aid.

But while a White House spokesman tellingly talked of US funding in the past tense - the officer overseeing reconstruction for the US Army Corps of Engineers said the US had never intended to rebuild Iraq completely. The $18bn was a springboard, he said.

Now, Amec, the biggest non-US operator in Iraq, warns that there is great uncertainty for the future.

Amec, through a joint venture with US engineer Fluor, won several major contracts in Iraq from the Coalition Provisional Authority, the interim body that subsequently handed over to the Iraqi government. In March 2004 the joint venture won a $500m deal to rebuild electricity infrastructure and secured a $1.1bn contract to restore its water system. Amec's share of these deals was $240m and $540m respectively. It also has a smaller contract for environmental work.

Amec says the work under the main three contracts is largely completed. It expects to finish what it was asked to do by the end of March.

However, Amec says the work it has done may not last long. A spokesman said: 'Recently, as much as 25 per cent of work completed has been repairing infrastructure damaged by insurgents. If funding levels are not maintained, insurgent activity could quickly [undo] much of our work over the past 18 months.'

He added: 'Regarding future work, we would say that with uncertainty in the region and the withdrawal of US funding, it is difficult to predict levels of activity.'

The insurgency has bedevilled the reconstruction effort and added massively to costs. Funds originally earmarked for rebuilding have been diverted to pay for exigencies such as training a security force.

Amec, which has several hundred project managers in the country, managing up to 10,000 contractors, has regularly had to stop projects because of insurgent activity. For smaller operators, the environment has often proved too much.

Graham Hand of the British Consultants and Contractors Bureau says that of about 30 British contractors in Iraq two years ago, there are now only half a dozen there. 'When companies first went out, they were told by the government that it was difficult, but would get better. It has got worse.'

Companies have to pay for the protection teams provided by outfits such as Control Risks, which employ ex-servicemen in armoured 4x4 vehicles to escort civilian personnel around the country at a typical cost of $5,000 to $8,000 a day.

Andy Bearpark, former head of operations at the Coalition Provisional Authority and now a UK-based consultant, says: 'The experience of reconstruction has been expensive, difficult and slow. People have not seen the improvements they thought they were going to see. The result is you get an Iraqi population that is disaffected.'

Despite Amec's claim that it has nearly finished what it was asked to do, Iraq's infrastructure appears to be in a worse condition that it was before the war. For example, the electricity supply is still around 4,000 megawatts, about the pre-war level. On average, there is 12 hours of supply a day. Meanwhile, oil production is 1.1 million barrels a day, below pre-war levels.

Lack of electricity causes civil unrest - there have been riots. And, as the US made clear, oil production is vital if Iraq is to stand by itself.

Bearpark says America has invested more than any other country, but it has not seen the results. 'It is a tough position,' he said.

There is some light, however. Neil Quillian, an Iraq analyst with Control Risks, says: 'Some contractors are saying they are optimistic following December's elections.' He says the fact that disaffected Sunni muslims participated in the vote suggests a more peaceful future.

Does he believe this? He is unsure. Does Bearpark? No. And Amec? The company will only repeat that the future remains uncertain.