The handover of sovereignty in Iraq will not be "derailed" after suicide bombers in Basra left 68 dead and more than 200 injured, the Government vowed last night.

Both British and local Iraqi officials pointed the finger of blame at al Qaida after a series of devastating rush hour car bombs ripped through three police stations and a police academy.

The dead included a number of primary school pupils killed when the buses taking them to school were caught up in the blasts.

Four British soldiers were among the injured in the attacks which marked the worst violence to hit the city since the start of the coalition occupation a year ago.

In the Commons, Tony Blair described the bombings as a sign of desperation by the terrorists. "They are prepared to attack literally the most defenceless people they can find simply in order to create the maximum chaos," he said.

Foreign Secretary Jack Straw said the attacks in the British-controlled city were clearly designed to disrupt the transfer of sovereignty to an interim Iraqi administration on June 30, but insisted the transition would go ahead as planned.

"My message to the terrorists is clear - we will not allow you to derail the process of transition to a sovereign and democratic Iraq," he said. "The people of Iraq will not be deprived of the better future they deserve."

The mayor of Basra, Wael Abdul-Hafeez, blamed Osama bin Laden's al Qaida network. "I accuse al Qaida," he said. "We have arrested a person disguised in a police uniform."

British officials said they believed that either al Qaida or former Baathists still loyal to Saddam Hussein were responsible.

They were confident that the attacks were not primarily the work of local Shias, although they acknowledged that the bombers probably had help from elements within the city.

One official admitted that it would have had huge implications for the British forces in the city if the southern Shias, who have largely supported the occupation, were turning against them.

* Terrorists targeted Saudi police headquarters in the capital Riyadh with a suicide bomb attack that killed at least nine people yesterday.

Riyadh had been tense following a series of clashes between police and suspected Muslim militants and a US warning of possible terror attacks.