New phone-tap row threatens President's nominee for CIA

The Bush administration is embroiled in a new electronic snooping storm, after allegations that major US phone companies had handed phone records of tens of millions of citizens to the ultra-secret National Security Agency.

The revelations provoked an uproar on Capitol Hill and could possibly even wreck the nomination of a former NSA chief to head the floundering CIA. So rattled was the White House that President George Bush took the unusual step of responding in person, denying that the government was "mining or trawling the lives of millions of innocent Americans".

In an unscheduled appearance before his latest trip to the Gulf Coast, Mr Bush insisted that his government was not breaking the law, and did not eavesdrop on domestic phone calls without approval. "Our intelligence activities strictly target al-Qa'ida and its known affiliates ... if [they] are making calls into and out of the US, we want to know what they are saying."

But the President conspicuously failed to deny what the USA Today newspaper actually reported - that three leading US phone companies - AT&T, Verizon and BellSouth - were handing over private phone records to the NSA for the spy agency to build a colossal database. This would be used to analyse calling patterns in the hunt for terrorist activity.

That the big phone companies co-operate with the NSA has long been an open secret, and it was far from clear last night whether the activities were in any way illegal. But the timing of the revelation could not be worse for the beleaguered White House.

Only five months ago it faced a separate firestorm after the disclosure that the NSA was eavesdropping, without warrants, on calls made within the US that were suspected of being linked to terrorism.

That programme had been led by the then director of the NSA, Air Force General Michael Hayden, who is now Mr Bush's nominee to head the CIA. At the very least he will now have to answer additional questions on the controversy before he is confirmed.

Conceivably, his nomination may now fail. Yesterday the White House abruptly cancelled a courtesy call General Hayden was due to pay to a key senator, citing "scheduling difficulties". The true reason, almost certainly, was to keep the general out of the public eye until the worst of the storm had abated.

Among Republicans and Democrats alike on Capitol Hill, the reaction was one of astonishment. "It is our government, not one party's government," said Patrick Leahy, the senior Democrat on the Senate Judiciary Committee. The committee's Republican chairman, Senator Arlen Specter of Pennsylvania, announced he would summon the phone companies "to find out what's going on".

Some analysts suggested the White House was in fact spoiling for a fight on the phone issue, confident that most Americans support such data-gathering by the government as part of the "war on terror". But the new controversy touches a very sensitive nerve among the public about the level of government intrusion in their lives.