This is the first I've heard of this. Rumor, or something more?
The Times Online hints in the middle of an op-ed,
Only recently has it become clear that in the battle for Basra earlier this year British troops remained aloof while Iraqi and American forces overwhelmed the Mahdi Army, followers of the cleric Moqtada al-Sadr. Apparently Britain had done a deal with the Shi’ite group. According to some reports, senior US officers and the Iraqi government have now lost faith in British forces.