On a day of high drama, a quiet Swede may just have turned back the tide of war

Hans Blix, the chief weapons inspector, unexpectedly threw sand in the cogs of war yesterday by suggesting that Iraq could yet satisfy United Nations demands that it rid itself of weapons of mass destruction if it acts quickly to resolve the riddle of its missing chemical and biological agents.

In an electrifying meeting, Mr Blix singularly failed to state that Iraq was in "material breach" of resolution 1441, dealing a crippling blow to the British and American hopes for an second resolution that would endorse a war on Iraq.

Updating the council on the progress of inspections to the UN Security Council, Mr Blix repeated that Iraq still had not answered critical questions but pointed to some new movement on the part of Baghdad to try to satisfy inspectors. He repeated that his teams still had found almost no evidence of proscribed arms.

With a report that remained mixed but was notably less dejected in tone than his last one delivered on 27 January, Mr Blix is likely to have fueled divisions that continue to plague in the Security Council as well as Nato and the European Union. France and several other countries seized on his findings to restate their argument that inspections should be allowed to continue.

There was little new ammunition in Mr Blix's words, by contrast, for Britain and the United States. The two countries must now decide whether to press forward and submit a new resolution to the Council declaring that Iraq is already in "material breach" of Resolution 1441 of last November, implying that the time for force has come.

Today Tony Blair will do just that when he signals his determination for military action even without a second UN resolution. He will tell the Labour Party's spring conference in Glasgow: "I will be failing in my duty not to say what I believe." A senior minister told The Independent: "Tony is prepared to go it alone. He thinks he is doing the right thing."

Mr Blix may have severely complicated the task of getting such a text adopted. Minutes afterwards, the White House said President George Bush was not on a tram-track to war. "The President remains hopeful that Iraq will, indeed, disarm and therefore avert the need for force to be used to disarm him," his spokesman, Ari Fleischer, told reporters.

As peace protestors prepare to take the streets worldwide today to denounce war, observers in New York agreed that Mr Blix's newest assessment appeared to have pushed the pendulum in the argument over Iraq marginally back in the direction of countries resisting the use of force.

If the veteran Swedish diplomat was under pressure from Washington to give Iraq the blackest possible grade for its co-operation, he certainly did not show it. Indeed, he twice called into question allegations recently made about Iraq's activities by the US Secretary of State, Colin Powell. Mr Powell looked on with a face of thunder.

"How much, if any, is left of Iraq's weapons of mass destruction and related proscribed items and programmes?" Mr Blix asked. "So far, Unmovic [UN Monitoring and Verification Commission] has not found any such weapons, only a small number of empty chemical munitions.

"Another matter – and one of great significance – is that many proscribed weapons and items are not accounted for. One must not jump to the conclusion that they exist. However, that possibility is also not excluded. If they exist, they should be presented for destruction. If they do not exist, credible evidence to that effect should be presented."

Mr Blix, whose presentation was followed by an accompanying report by Mohamed al-Baradei, the director of the International Atomic Energy Agency (IAEA), reflected that the inspections process, when it was first initiated in 1991 after the Gulf War, was designed to be short.

Iraq still has the chance, he argued, to bring the new phase of inspections, started 11 weeks ago, to a swift conclusion.

"Today, three months after the adoption of Resolution 1441, the period of disarmament through inspectors could still be short if 'immediate, active and unconditional co-operation' with Unmovic and the IAEA were to be forthcoming," Mr Blix said, possibly with an eye on UK-US consideration of a possible ultimatum in a second resolution. It would set a final date for Iraq to come into compliance.

Mr Baradei told the Council that his inspectors had also found no evidence Iraq had resumed its nuclear weapons programme and said inspectors could do their job without Iraq's full co-operation. "We have to date found no evidence of ongoing prohibited nuclear or nuclear-related activities in Iraq," he stated.

Positive improvements noted by Mr Blix included a decree issued by Saddam Hussein yesterday banning the importation or the production of weapons of mass destruction. He noted that Iraq had agreed to set up a second commission of its own to seek out new documents to demonstrate that the missing agents were long ago destroyed. It also offered names of 80 people to Mr Blix who witnessed that destruction.

The clash of opinions over what do next was starkly on display in the Council as Mr Powell sought to contend that the gestures made by Iraq amounted to nothing more than a continuing cat and mouse game. With these eleventh-hour manoeuvres, Iraq was trying to "throw us off the trail," Mr Powell argued.

"To this day we have not seen the level of co-operation that was ... hoped for," Mr Powell insisted. And disputing those arguing for more time for inspections, he said: "We cannot allow this process to be endlessly strung out."

Giving strong support to Mr Powell, the Foreign Secretary, Jack Straw, who flew to New York by Concorde for the session, urged all 15 members to "hold our nerve in the face of this tyrant", President Saddam Hussein.

But several speakers firmly took the stance that inspections should be allowed to continue. The French Foreign Minister, Domique de Villepin, contended that Mr Blix's report showed that progress was being made."War is always the sanction of failure," Mr de Villepin asserted. "We must give the inspectors every chance of succeeding."

His statement triggered applause in the gallery of the Security Council, an extremely rare – and, under UN protocol, strictly discouraged – event.

Significantly, however, Mr Villepin called for another report from Mr Blix on 14 March. He said that if, at that time, the inspectors find their efforts are failing, then it might be time for the Council to declare Iraq in "material breach", a code for war.

"But that's not the time in which we are today," he said. Some other swing countres, including Mexico, also said they were not ruling out the use of force for ever. In an unexpected fillip for the French as well as for the French-German-Russian common position in favour continuing inspections, Mr Blix revealed that he had already authorised the deployment of French Mirage aircraft starting late next week as well as unmanned drones to be supplied by Germany. He also suggested that he was likely to accept a Russian offer of Antonov aircraft with night vision.

With Mr Powell just across the horseshoe of the Council table, Mr Blix openly questioned the conclusion drawn by the Secretary of State from one of the satellite images he presented as evidence of Iraqi malfeasance 10 days ago. According to the US interpretation it showed lorries clearing banned materials from a bunker complex just prior to an expected inspection.

"The reported movement of munitions at the site could just as easily have been a routine activity as a movement of proscribed munitions in anticipation of an imminent inspection," Mr Blix responded. "Our reservation on this point does not detract from our appreciation for the briefing."

He also contradicted a claim made by Mr Powell that Iraqi intelligence agents have infiltrated his inspection teams and have been able to predict their every movement. "In no case have we seen convincing evidence that the Iraqi side knew in advance that the inspectors were coming," the inspector said flatly.

The decree from President Saddam on weapons production came just hours before the start of yesterday's crucial UN session. "Individuals and companies in private and mixed sectors are banned from importing and producing chemical, biological and nuclear weapons," it read. It went on to say that materials used in producing them were also banned. Such a ban had been a key UN requirement on Iraq.