Powerline has a better take on this idiotic story than I:
"So we have at least three layers of anonymity between us and the story's headline. Unknown American officers allegedly have told unknown counterparts in British military or intelligence circles that they will resign, and these unidentified persons allegedly passed the word to an anonymous "source with close ties to British intelligence." There is a word for this sort of fourth-hand information. It's called a "rumor."
Apart from references to other news stories, the Times quotes just one person by name: Hillary Mann, who repeats her oft-stated fear that the Bush administration intends to provoke an armed confrontation with Iran. Mann and her husband are both career bureaucrats who quit their jobs in a huff because the administration wasn't following their preferred course of negotiating a "grand bargain between the United States and the Islamic Republic." You can read about their battle against the administration on the Democratic Party's web site."
http://powerlineblog.com/
Essentially, this London Times story is based on nothing more than the insane rants of a notorious Bush-hater, going by the name of Hillary Mann. It's worse than useless.
Also, this defeatist BS is always published on the weekends. Always. They'd never get away with it in the weekday cycle.
If you read the Reuters propaganda headlines on Saturday or Sunday, you'd swear the Muslims had already won and were running the world.