"In the light of the last week's events ... it is prudent that we pause any further reductions while the current situation is unfolding," Browne told parliament, referring to five days of fighting between Iraqi troops and militants in the city.
"At this stage we intend to keep our forces at their current levels of around 4,000 as we work with our coalition partners and with the Iraqis to assess future requirements."
Britain announced last October it intended to cut troop numbers to 2,500 "from the spring" of this year - meaning from around April - but Browne said insecurity in Basra, Iraq's second largest city, had now made that impossible.
He said he would give a further update on force levels later this month, but offered no concrete timeframe for when more troops could be withdrawn from a conflict that is largely unpopular in Britain.
British defence officials said last year that all troops could be pulled from the country by 2009, but that now looks unlikely given the instability that has ensued since Britain handed responsibility for Basra to Iraqi forces last September.
U.S. Defence Secretary Robert Gates said on Monday that the latest unrest in Basra would not affect plans to withdraw 20,000 U.S. troops by July.
Browne on Tuesday defended Britain's decision initially not to get involved in last week's street fighting, in which an estimated 500 people were killed, saying it was part of Britain's plan to transfer more authority to the Iraqis.
However, he said Britain had eventually deployed forces including tanks to try and curb the violence after U.S. warplanes carried out air strikes in support of Iraqi troops on the ground.
"While UK and coalition forces have done much to deliver broad levels of security, over the longer term only the Iraqis can successfully tackle criminal activity and political violence, which are often linked to social and economic factors," Browne told parliament.
"The events of the last week should be seen in this context."
The fighting in Basra, Iraq's chief oil-export hub, broke out after Iraq's prime minister, Nuri al-Maliki, sent his own forces in to try to quell the threat from Shia militants loyal to the cleric Moqtada al-Sadr.
However, the militia resistance proved much greater than the Iraqi government expected and Iraqi forces eventually pulled back after five days and having struck a tentative deal with Sadr.
