IT WAS gracious of Iyad Allawi, the Iraqi interim Prime Minister, to thank the British people for their support in the pages of The Times last week. Quite rightly, he acknowledged the hefty price in blood and treasure paid by this country to bring democracy to Mesopotamia.

Understandably, Mr Allawi did not say that both he and his own al-Iraqia list have been the greatest beneficiaries of British and American support in recent years. For this former Baathist has long been a favourite of the Foreign and Commonwealth Office, and of its American counterpart at Foggy Bottom.

Thanks in part to his patrons in London and Washington, he was able to run much the most expensive campaign of the Iraqi election, including a five-part television series on al-Arabiya that made much of his erstwhile Baathist credentials. Its message was that you need a strongman like me to handle things in the current crisis. The Baath was essentially a good organisation, he contended. All that was wrong was Saddam, who perverted its high ideals for his own monstrous ends.

But the Allawi roadshow has been for naught — partly because most Iraqis have no electricity with which to turn on their televisions. He appears to have polled no more than in the mid-teens — his best showing was among Baathist exiles in Syria — and it is hard to envisage how he can continue as Prime Minister. Whitehall’s great white hope seems to be a great white elephant.

By contrast, the United Iraqi List, the largely Shia bloc, appears to have cruised home to victory. Less commented upon, though, is the re-emergence as a key powerbroker of Mr Allawi’s great rival, Ahmad Chalabi of the Iraqi National Congress. He has now secured the support of some important compatriots to become prime minister, or else vice-president.

Mr Chalabi is known largely in the West as the favourite of the Washington neoconservatives congregated heavily in the Pentagon and the office of Vice-President Dick Cheney. He seemed to have fallen spectacularly from grace last May, when his offices were raided by American security forces after allegations that he had informed the Iranians that the US had broken some of their secret codes.

This reflected a longrunning grudge held against him by the British and American foreign policy establishments, who are inveterate foes of the neoconservatives’ Wilsonian vision for the region. Indeed, senior MI6 officers have reviled him as a “salonista” with no support on the ground after his long years of exile in this country.

In fact, Mr Chalabi has proved to be a highly adept manoeuvrer in Baghdad since its liberation. He was the key figure in brokering the United Iraqi List. He was able to fend off the demands of pro-Iranian elements for a manifesto that committed the bloc to Khomeini-style clerical rule, obtaining the support of Grand Ayatollah Ali al-Sistani for a less purist approach.

So how did King Charles Street get it so wrong about this cultivated scion of one of Iraq’s pre-eminent Shia families? Partly, Mr Chalabi was the victim of a classic Washington power play. But it was also an authentic dispute about contending visions of the future of the Middle East. More than anyone else, he personifies the acute, pluralistic challenge to the authoritarian, predominantly Sunni Arab, regional order.

If the despised Shia Arab majority of Iraq is empowered through the democratic process, what does that mean for the stability of long-time Sunni clients of the West? Above all, what does it imply for the House of Saud — upon which Britain’s remaining defence industries are so heavily dependent — and who rule over a large Shia population in the oil-rich eastern provinces?

Much of the transatlantic mandarinate duly recognised that President Bush’s democratic passions could open up a can of worms. But Mr Bush, backed by Tony Blair, decided to overthrow Saddam, so they reconciled themselves to the outcome. Instead, they sought to make the President’s vision as unthreatening as possible. Once the fighting was over, they laboured to slow the pace of “de-Baathification”.

The mandarins also endeavoured to give Sunni Arab states and the UN — which many Iraqis regard as accomplices to Saddam’s tyranny — a substantial say in the running of the place. Thus, when John Sawers, the political director of the Foreign Office, informed Mr Chalabi that it was very important for President Mubarak of Egypt to play a significant part in shaping the emerging Iraqi polity, the INC leader retorted, “if you really expect me to support that, you don ’t understand what I’m trying to achieve.”

What Mr Chalabi seeks is a radical break with Iraq’s Baathist past and its unthinking adherence to the wider Arab nationalist belief that the West is principally responsible for the region’s ills. This also entails breaking with the ex-Baathists — the “lustration” of the system. But these are the very men upon whom the CIA and MI6 would depend to defeat the insurgency, partly on the principle that you set a thief to catch a thief. Mr Allawi was the political embodiment of this approach.

Mr Chalabi contends that one of the reasons why relatively few of his countrymen are assisting the coalition is because the “new” intelligence services are thoroughly penetrated by Baathists who have not been properly “turned”. “The security plan envisaged for Iraq after the granting of sovereignty has failed", Mr Chalabi said in an interview with The Times. “Attacks on coalition forces have doubled since then.” To rectify this, Mr Chalabi proposes turning over control of the security ministries to a representative commission of the National Assembly.

Expect soon a sharp tussle of wills based upon the old question of “who rules?” Mr Chalabi will be at the heart of this feud — and of its resolution. His renaissance gives the lie to the notion that expatriates lack credibility with their countrymen. But then as Harold Macmillan used to say, when the British Establishment is united on a point, it is almost always wrong.

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