US restores Iraqi opposition funds

US hardliners want to topple Saddam Hussein

The United States has agreed to restore funding to one of the main Iraqi opposition groups, the Iraqi National Congress.

The US had suspended its funding earlier this month because it said the organisation had failed to properly account for millions of dollars in US aid it had received.

Funding has now been resumed at previous levels, US State Department officials said following talks with INC representatives in Washington on Wednesday.

President Bush has pledged to fight the "threat from Iraq"

The BBC's John Leyne in Washington says the decision to resume INC funding is likely to be seen as a victory for the hawks in the Bush administration.

It comes a day after President Bush named Iraq as part of what he called an "axis of evil", along with Iran and North Korea.

Our correspondent says hardliners in the US administration would like to build up the INC to threaten Iraqi President Saddam Hussein's hold on power - much in the same way that the United States worked with anti-Taleban forces in Afghanistan.

Critics of the plan, however, say ridding Iraq of Saddam Hussein would be far harder than defeating the Taleban.

Even after defeat in the 1991 Gulf War, Iraq's army has had little trouble defeating uprisings by opposition groups.

Lack of control

US Deputy Secretary of State Richard Armitage signed the funding agreement, which will give the group $2.4m over the next three months with further money to come.

It is contingent on the completion of accounting improvements, the officials said.

We were very, very encouraged by the president's speech

INC spokesman Sharif Ali

State Department official Gregg Sullivan had previously said the London-based group did not have sufficient financial controls and was unable to account for the money it had been given.

The group had been given until 31 January to institute financial controls.

The INC expressed its approval of Mr Bush's remarks on Iraq in his State of the Union address.

Al-Sharif Ali bin Hussein, a spokesman, told reporters after the meetings that US officials had assured him that a change of regime in Iraq was a US foreign policy priority.

"We expressed that we were very, very encouraged by the president's speech," Mr Sharif Ali said.

'No wrongdoing'

The US had previously said the suspension was not policy-based, and that no wrongdoing had been found.

The group had requested $25m from the US, $17m of which was to be used for operations inside Iraq.

The Bush administration approved about $8m in new grant money, prompting the opposition group to reject the offer.

Washington had said it would restore the full $25m grant if the INC improved its management, US officials had told the Los Angeles Times newspaper.