Germany faces sensitive Iraq spy probe

BERLIN, Mar 6 (Reuters) The German government lost a political battle today to stave off an investigation into whether its spies in Iraq secretly helped the United States launch the 2003 invasion that Berlin had strongly opposed.

The liberal Free Democrats (FDP) became the third opposition party to demand a parliamentary inquiry. With the Greens and Left party also in favour, the opposition can now comfortably muster the 25 percent of votes needed to force such a probe.

''We want to get to the bottom of things,'' FDP parliamentary leader Wolfgang Gerhardt told a news conference.

He said the government had failed to clear up a string of media allegations that two German agents in Baghdad had supplied information that helped the United States launch the devastating bombing raids that began the invasion of Iraq.

The FDP decision means the investigation looks certain to go ahead, potentially embarrassing the security services and hampering Chancellor Angela Merkel's efforts to improve relations with the United States.

The current government has acknowledged that information passed on to the Americans from German intelligence included some descriptions of the Iraqi police and military presence in Baghdad.

But it denies this was used for U.S. bombing. It says the information also helped prevent bombing of civilian targets.

Merkel is not threatened by the allegations, as her conservative Christian Democrats were in opposition at the time.

But the reports have whipped up a political storm over the role of the previous government of Social Democrat Gerhard Schroeder, who narrowly won re-election in 2002 on the back of his fierce opposition to the looming war in Iraq.

US TIES Among persistent questions raised is whether Schroeder's government deliberately misled the public. Schroeder's chief of staff and intelligence supervisor, Frank-Walter Steinmeier, is foreign minister in Merkel's right-left coalition government and is expected to come under close scrutiny.

The probe could also further embarrass the security services and, by keeping the Iraq war in the spotlight, hinder Merkel's efforts to improve relations with Washington that were severely strained by Schroeder's anti-war stance.

Steinmeier told parliament in January that an inquiry would be a time-consuming and distracting attempt to discredit the Schroeder government.

''What I fear is that, for a year or even longer, we would help to make anti-Americanism and rejection of NATO acceptable in this country again,'' he said.

The parties must now agree on the inquiry's scope and terms of reference -- a potentially sensitive issue especially for the Greens, who were in coalition with Schroeder at the time of the Iraq war.

FDP and Green politicians both said the investigation should also cover other sensitive aspects of security relations with the United States.

These include the alleged abduction of a German national by the US Central Intelligence Agency to Afghanistan, and the use of German bases and airspace for secret CIA flights that may have been used to transport terrorism suspects to countries that practise torture.

REUTERS CH PC2321