  The linewidth of an atom laser is limited by density fluctuations in the
Bose-Einstein condensate (BEC) from which the atom laser beam is outcoupled. In
this paper we show that a stable spatial mode for an interacting BEC can be
generated using a realistic control scheme that includes the effects of the
measurement backaction. This model extends the feedback theory, based on a
phase-contrast imaging setup, presented in \cite{Szigeti:2009}. In particular,
it is applicable to a BEC with large interatomic interactions and solves the
problem of inadequacy of the mean-field (coherent state) approximation by
utilising a fixed number state approximation. Our numerical analysis shows the
control to be more effective for a condensate with a large nonlinearity.
