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Last Updated: Wednesday, 2 June, 2004, 07:31 GMT 08:31 UK
US spy coup 'leaked' by Chalabi
Ahmed Chalabi
Chalabi strongly denies passing US secrets to Iran
A former ally of the US in Iraq, Ahmed Chalabi, told Iran that Washington had cracked codes used by Tehran's spy network, US media reports say.

Mr Chalabi broke the news to an Iranian intelligence chief in Baghdad, the New York Times says, quoting US officials.

The officials said the leak was one of Washington's reasons for breaking with Mr Chalabi, the paper reported.

Mr Chalabi was once seen by the White House as a possible Iraqi leader, but the relationship has soured badly.

Last year, Mr Chalabi was one of the first Iraqi exiles to be flown back into Iraq following the US-led invasion.

However, he became increasingly distanced from Washington over allegations that he was linked to Iranian hardliners.

The US has also questioned the quality of intelligence provided by his party, the Iraqi National Congress, in the run-up to the invasion.

The Pentagon had been paying Mr Chalabi's party $335,000 a month as part of an intelligence-gathering programme, but cut off funding last month.

A few days later, American and Iraqi forces raided his home and offices, seizing documents and computers.

'Drunken' revelation

The New York Times now says that Mr Chalabi is accused of telling the Iranians that the US had broken the secret communications code of Tehran's intelligence service.

The information was discovered, says the paper, when the US intercepted a note from an Iranian agent in Baghdad detailing his conversation with Mr Chalabi.

The agent told his masters in Tehran that Mr Chalabi claimed to have obtained the information from a drunken American who gave the game away, the paper said.

It has not been revealed how the US broke the code in the first place.

The New York Times says it has known of the allegation for some time, but was asked by the Bush administration to withhold publication, in order to avoid compromising a vital intelligence operation.

That request was withdrawn on Tuesday and the FBI is now investigating the matter, says the paper.

Mr Chalabi has strenuously denied passing any classified information to Iran.

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