The governor's office in the Iraqi city of Basra has been taken over in protest at coalition actions against radical Shia Muslim cleric Moqtada Sadr.

About 150 men took over the building in a dawn invasion that met no resistance today. They said they were staging a peaceful sit-in in the country's second city.

The governor, Wael Abdul Latif, fled the building earlier.

Sadr is an outspoken opponent of the US-led occupation and the coalition recently arrested one of his top aides, Sheikh Yakubi, and closed down a newspaper accused of inciting anti-US violence.

Dozens of militants belonging to Moqtada Sadr's Mehdi Army were reported to have moved into the governor's office in Basra at dawn chanting "No to America, we'll sacrifice ourselves to Sadr" and waving pictures of their leader.

The protesters said they were engaged in a peaceful sit-in in protest at the crackdown on their movement and there was no immediate sign of the UK coalition forces who control Basra.

Hundreds more protesters gathered outside the building.

A spokeswoman for the Ministry of Defence in London said talks were under way between the protesters and Iraqi officials.

British troops clashed with protesters in the south-eastern town of Amarah yesterday

The Ministry of Defence said the soldiers came under fire from a "criminal element" in the crowd armed with guns and rocket-propelled grenades.

No British troops were injured in the incident although a MoD spokeswoman said that there were a number of Iraqi casualties.

* Iraq's US administrator Paul Bremer said Sadr was an 'outlaw threatening Iraq's security'.