'Libi was coerced into linking Iraq with al-Qaeda'

While it was known that Ibn al-Shaykh al-Libi recanted his statements in March 2004, this is the first time US officials admitted he had lied about the Iraq-Qaeda links to obtain better treatment from his captors, the daily said.

It is also the first public evidence that bad intelligence on Iraq may have been in part the result of the US policy of rendition, by which suspects are sent abroad for interrogation to skirt strict US rules against prisoner abuse, the daily added.

Libyan by birth, Libi was captured in Pakistan in late 2001 becoming the highest ranking al-Qaeda leader in US custody. He was held initially in Afghanistan but transferred to Egypt in January 2002, said the US officials who spoke on condition of anonymity.

Libi made some statements about Iraq and al-Qaeda in US custody, but it was only after he was sent to Egypt that he made the most specific assertions that were later used by the US government to justify its war against Iraq's Saddam Hussein, the sources said.

Libi later said he had made false statements to escape harsh treatment in Egypt, a claim a US government official told the daily that has not been corroborated.

Returned to US custody in February 2003, Libi withdrew his claims about Iraq and al-Qaeda in January 2004.

The New York Times disclosure is sure to prompt more criticism of the US administration of President George W. Bush, already under fire for misleading the public about Iraq's nuclear arsenal, which has never been found.

Egypt's Ambassador in the United States, Nibil Fahmy, told the newspaper in a telephone interview that he knew nothing of Libi's case, but that the Egyptian government was "not in the business of torturing anyone."

After March 2002, the US Central Intelligence Agency began maintaining custody of al-Qaeda leaders it captured, rather than relinquishing them to foreign authorities.