The Italian businessman at the centre of a furious row between France and Italy over whose intelligence service was to blame for bogus documents suggesting Saddam Hussein was seeking to buy material for nuclear bombs has admitted that he was in the pay of France.

The man, identified by an Italian news agency as Rocco Martino, was the subject of a Telegraph article earlier this month in which he was referred to by his intelligence codename, "Giacomo".

His admission to investigating magistrates in Rome on Friday apparently confirms suggestions that - by commissioning "Giacomo" to procure and circulate documents - France was responsible for some of the information later used by Britain and the United States to promote the case for war with Iraq.

Italian diplomats have claimed that, by disseminating bogus documents stating that Iraq was trying to buy low-grade "yellowcake" uranium from Niger, France was trying to "set up" Britain and America in the hope that when the mistake was revealed it would undermine the case for war, which it wanted to prevent...

...THEN THE STORY TOOK A BIZARRE TURN. That same day, October 9, an Italian journalist walked into the U.S. embassy in Rome and delivered a set of documents purportedly showing that Iraq had indeed purchased uranium from Niger. The embassy provided the documents to the State Department and the CIA. At State, an INR analyst almost instantly suspected the documents might be forgeries. Although several different CIA divisions received copies of the documents, the agency provided no immediate evaluation of them and did not identify them as likely fabrications.

Two events in the fall of 2002 seemed to enhance the credibility of the initial reporting on an Iraq-Niger deal. First, a French diplomat told the State Department that his government had received additional, credible reporting on the transaction and had concluded that the earlier reports were true. A second report, this one from the U.S. Navy, suggested that uranium being transferred from Niger to Iraq had been discovered in a warehouse in Cotonou, Benin. Although that report indicated that the broker for the deal was willing to talk about it, he was never contacted by the CIA or military intelligence...