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The Federal Government was warned repeatedly by intelligence analysts before the Iraq war that the conflict would harm the war on terrorism by fanning Islamic extremism and spurring terrorist recruiting.
An investigation by the Herald, which has included interviews with several serving and retired intelligence figures, has uncovered that John Howard and his senior colleagues were briefed on the dangers, verbally and in written reports.
Yet the Prime Minister told Australians on the eve of the conflict that the war would lessen the terrorist threat, contradicting his intelligence advice.
It was revealed last year that Britain's joint intelligence committee said one month before the war that "al-Qaeda and associated groups continued to represent by far the greatest terrorist threat to Western interests, and that threat would he heightened by military action against Iraq".
Mr Howard has confirmed Australia received this advice and it went into the decision-making "mix", but has studiously avoided comment on what the Australian agencies told him on the subject.
Last night his spokeswoman said: "We will not respond to unsourced, non-specific allegations of this kind."
Mr Blair is concerned also that a trip to the US now would effectively be giving a boost to Bush ahead of November's presidential elections.
"The Democrats are watching the situation very carefully and there would be uproar if Tony travelled to Washington to meet (Republican) Bush so close to the presidential elections," the government source said.
"But Bush isn't letting up. The White House has already let it be known that they feel slighted because of this and believe they can use this to put pressure on Blair to get him out there."
BRITISH Prime Minister Tony Blair is refusing to fly to the United States to receive a medal bestowed on him by the nation for his support over last year's Iraq war, a London newspaper reported today.