BRITAIN: Mr George Galloway, the British Labour backbench MP, was locked in a battle to save his controversial political career as he launched a libel action against the London-based Daily Telegraph last night.
Mr Galloway's lawyers acted as the paper accused him of taking as much as £370,000 a year from Saddam Hussein in return for support for the fallen dictator.
The extraordinary allegations were immediately branded as "extremely serious" by the British Labour Party chairman, Mr Ian McCartney, who said the party would launch an immediate investigation.
Mr Galloway yesterday instructed his solicitors to sue the Daily Telegraph, claiming he had probably been framed by western intelligence services. He also warned: "Tony Blair will be making the mistake of his life if he seeks to throw me out of the party".
Documents, found in a boxfile in the Iraqi foreign ministry in Baghdad, allegedly reveal that Mr Galloway pressed an unnamed Iraqi intelligence officer on St Stephen's Day 1999 for cash from the oil for food programme.
Further documents published last night purport to reveal the reply from Saddam Hussein.
Mr Galloway angrily responded to the latest allegations: "Since there was no request for cash by me in the first place, there can be no reply from Saddam or anyone else. These documents are of very dubious provenance. I simply ask 'Who collected the money? How did they give it to me and where is it now?' If anyone can answer these questions, it is a story, but no one can, because all this is a pack of lies'." Mr Galloway did not deny that the organisation he founded, the Mariam Appeal, received cash from his friend Mr Fawaz Zureikat, an Iraqi trader.
He acknowledged that Mr Zureikat was registered to trade in the oil for food programme at the UN. He said he did not ask Mr Zureikat how he raised his cash, just as he did not ask the United Arab Emirates, one of the organisation's other donors, how it raised its cash. He insisted he was not a personal beneficiary of the trust.
Mr Zureikat said he was simply a donor, a co-ordinator and a supporter of the Mariam Appeal, and the Daily Telegraph memo was "fabricated." The newspaper alleged Mr Galloway took a cut of oil money worth at least £375,000 a year.
The document, allegedly sent to Saddam Hussein in January 2000, says of Mr Galloway: "He needs continuous financial support from Iraq.
"He obtained through Mr Tariq Aziz (Iraq's deputy prime minister) three million barrels of oil every six months, according to the oil for food programme. His share would be only between 10 and 15 US cents per barrel." The newspaper went on to allege that the Labour MP met the Iraqi spy chief on St Stephen's Day 1999, when he asked for a greater cut of the exports, to be sent under cover.
Mr Galloway, according to the document, had also profited from food contracts and sought "exceptional" business deals.
Mr Galloway insisted he was not registered to trade under the oil for food programme, so would not have been permitted to receive cheques from the UN, the only source of funding in the oil for food programme. He said all the cash for the oil for food programme was held in a UN escrow account.
But Mr Galloway's explanation came under challenge when Mr Ian Steele, a UN oil for food programme spokesman, said once a registered oil buyer was given clearance, they would go to the Iraqi state oil marketing organisation to enter into a contract.
Speaking from the UN in New York, he said: "So there are no cheques flying around here. It is not that kind of arrangement".
The pressure on Mr Galloway comes after the Labour whips had already told him he was to be disciplined for urging British troops not fight in an "illegal" war against Iraq, and for accusing Tony Blair and George Bush of descending "like wolves" on Iraq.
But the Labour hierarchy will have to move cautiously since the pending libel action might require the party to postpone action.
Alternatively the party could discipline him solely over his remarks during the war.