Freed reporter names Cheney aide

She told the panel her source was Lewis Libby, chief of staff for Vice President Dick Cheney.

Her evidence may signal that an end is close to a two-year inquiry triggered by the publication of the name of the CIA agent Valery Plame. Ms Plame is married to the former ambassador Joseph Wilson, a critic of the Iraq war.

Mr Wilson claims her name was leaked as a deliberate retaliation by the White House to discredit him, but which made it impossible for her to work under cover.

The grand jury has already heard from Karl Rove, Mr Bush's deputy chief of staff. The White House adviser is known to have discussed the Plame affair in summer 2003 with another journalist, Matthew Cooper of Time magazine, who has told that to the grand jury. Mr Libby has also appeared before the jury.

Ms Miller spent 85 days in a suburban Washington prison after refusing to divulge her sources, even though, unlike Mr Cooper and Robert Novak, the columnist who first disclosed Ms Plame's identity, she never wrote an article about it.

Some observers say her testimony yesterday may enable Patrick Fitzgerald, the government-appointed special prosecutor, to complete his inquiry. He then must decide whether to bring indictments, or conclude that no crime was committed.

Even so, many questions are still a mystery, not least why Ms Miller remained in jail so long. She says that only now has she received a voluntary and personal waiver of confidentially from Mr Libby. But his lawyers say that waiver has been on offer for months.

Some sources believe Mr Fitzgerald was preparing to extend the grand jury term, which was to end this month. Then Ms Miller would have faced further jail time had she continued to refuse to co-operate.

The focus now switches back to a White House already under siege over its handling of the Iraq war and its response to Hurricane Katrina. For the Bush team, it will be a very anxious wait. Charges against Mr Rove, Mr Libby or another administration aide would be a massive embarrassment, reinforcing the impression that the Republicans who run Washington are awash in sleaze.

The inquiry also turns the spotlight back to the US failure to find weapons of mass destruction in Iraq, the main justification for the invasion.

Mr Wilson earned the White House's wrath by publicly debunking administration claims that Saddam Hussein had sought to buy uranium yellow cake in Africa - proof, George Bush said then, that Iraq had an active nuclear weapons programme.

Last night the White House again refused to comment on what it termed "an ongoing investigation". But the President "wants to get to the bottom of it", a spokesman said.