Saddam was bluffing over WMD stocks, says report

New blow for Bush over failure to find weapons as turmoil continues in Baghdad

The Bush administration is bracing itself for the publication of a report today that will confirm the failure to find any weapons of mass destruction in Iraq - the main justification given for the war.

David Kay, head of the Iraq Survey group which is leading the hunt for the weapons, is expected to tell the House and Senate Intelligence committees that Saddam Hussein may have been bluffing over whether he possessed chemical and biological arms.

Mr Kay is likely to highlight the instructions issued by Baghdad to Iraqi commanders in the field shortly before war, to use chemical weapons against the invaders. Mr Kay will probably say that these instructions, intercepted by US intelligence services, were fakes, intended by Saddam to make himself appear a greater threat that he was.

Officially, his report will be "inconclusive" and stress Saddam's skill at hiding his prohibited weapons. But it may also raise the possibility that he had them scrapped shortly after, or even before, the 1991 Gulf War, which drove his forces from Kuwait.

At most, the report will say that the Iraqi dictator had the capabilities, in terms of precursor chemicals and "dual use" facilities, to restart production quickly once UN sanctions had been lifted.

Even though the findings of Mr Kay, a former UN weapons inspector and an adviser to the CIA, are being called "interim" - suggesting that the hunt may yet yield proof of illegal weapons - they are likely to generate criticism of the administration and its use of pre-war intelligence.

Either the intelligence was faulty, or it was deliberately exaggerated by hawks to bolster the case for war.

The report is being issued days after the Republican- controlled House Intelligence Committee delivered a stinging attack on the CIA, accusing the agency of using "outdated and piecemeal" data in compiling its assessment of the Iraqi threat.

That embarrassment co- incided with the opening by the Justice Department of a criminal investigation into allegations that the name of an undercover CIA operative was leaked by the White House - apparently to get back at the agent's husband, the former ambassador Joseph Wilson, a noted critic of the war.

Yesterday, White House staff were going through their records and telephone logs for information relevant to the investigation. But President George Bush's spokesman said he knew of no one who had gone to the department with information on the case.

He also said that, to the best of his knowledge, no White House officials had hired outside legal help - a routine procedure during Bill Clinton's time at the White House between 1992 and 2000, which was beset by scandals. The President's spokes-man also said that the White House would agree to polygraph tests for staffers, if the FBI requested them.

Mr Bush has promised to co-operate fully with the inquiry, but Democrats said that Justice Department officials could not conduct an impartial investigation. They are calling on John Ashcroft, the Attorney General, to name an outside prosecutor. But Republicans rejected these demands.