A chemical plant which the US secretary of state, Gen. Colin Powell, recently identified as a key component of Baghdad's weapons program was reportedly built with 'secret' British backing in 1985.
A front page report in 'The Guardian' which called it Britain's 'dirty secret' and said the then Tory Government of Margaret Thatcher helped the Iraqis construct the 14 million pound 'Falluja 2' plant, less than 100 km outside Baghdad, despite warnings from Foreign Office and the Ministry of Defense it might be used to manufacture mustard and nerve gas.
The deal it said, was deliberately hidden from the American Administration which was then 'pressing for control on such exports'. There was no official comment, but antiwar MPs were expected to call for a statement.
The Falluja 2 site, according to The Guardian featured in Collin Powell's 'dossier of reasons why the world should go to war with Iraq'.
It also recalled that satellite pictures of the plant identifying it as a chemical weapons site were earlier published by the CIA, and a report by Britain's joint intelligence committee, published with the British Prime Minister, Mr. Tony Blair's 'imprimatur' last September, too focused on Falluja 2.
The revelation, complete with the names of the companies, and a facsimile of a confidential official document relating to the deal, came on the heels of recent reports about the US role in the eighties in propping up Saddam Hussein's weapons program to counter Iran.
The Guardian report was seized by critics to denounce the British-US campaign against Iraq as 'hypocritical'. It was particularly embarrassing for the Tories who are now bitter critics of the Hussein regime.
The deal was primarily pushed by the Department of Trade and Industry which overruled the Foreign Office and the Ministry of Defense advice on the ground it would hurt British 'trade prospects in Iraq'.
Paul Channon, then Trade Minister, concealed the existence of the chlorine plant contract from the US administration and also instructed the export credit guarantee department to keep the details of the deal secret from the public, it said.