The British Foreign and Commonwealth Office (FCO) on Tuesday announced it would close a consulate in Iraq's southern city Basra, while adding more staff in Baghdad for better "efficiency."

According to a written statement to parliament, the FCO decided to move its "representation in Basra onto a different footing."

"We will maintain a British Embassy Office in Basra to support our work with all of Iraq's central and southern governorates. However, this will not be staffed permanently," British Foreign Secretary William Hague said.

"This allows us to reduce the cost of our presence in Basra, currently 6.5 million pounds (10.47 million U.S. dollars) per annum," Hague said.

Alistair Burt, Foreign Office Minister for the Middle East, explained the background to the decision to close the consulate in Basra.

"Iraq is a huge country and what we're doing by making these changes is to make sure we can cover all parts of it even more effectively than we've done up to now. We can make sure we're covering Basra by deploying more people in Baghdad," Burt said.

"Our team in Baghdad will do the job in Basra that needs to be done. It's a very important area for us with the oil fields, with the potential for infrastructure development. We're already doing well with contracts there," he added.