The e-mail was from a friend I hadn’t heard from since the start of the war with Iraq. “Recalling our earlier conversations ... ” it began. We’d had quite a few talks in the past about the merits of taking on Saddam: I was for, he was against. Like most anti-war protesters, he was convinced it was a war for oil. I thought it was for other reasons, which would have as a happy consequence the overthrow of a tyrant.

So there was a whiff of triumph in his latest correspondence, relaying the headline from The Guardian’s online edition of June 4. “Wolfowitz: Iraq war was about oil.” Aha! See what a sap I had been? The article went on: “The US deputy defence secretary, Paul Wolfowitz — who has already undermined Tony Blair’s position over weapons of mass destruction by describing them as a ‘bureaucratic’ excuse for war — has now gone further by claiming the real motive was that Iraq is ‘swimming’ in oil.”

My bullshit detector went off immediately. Why on earth would Wolfowitz, the Pentagon’s ideologue, make such a crude admission? What’s more, The Guardian claimed he had made this “frank assessment” at an Asian security summit in Singapore, which was reported in two German newspapers. Hmm. Let’s hear it in plain English.

I should have replied: “Pah! I don’t believe it.” But, in case I was wrong, I e-mailed back frostily: “I’m surprised Wolfowitz has said this and I’d like to see his remarks in context . . .”

I did not have to wait long. The next morning The Guardian deleted the article and confessed he had said nothing of the kind, but the lie had already spread. In Russia, Pravda picked up the story; more damagingly in the Middle East it has been reported in Dar al hayat, the Beirut newspaper, on Radio Shi’i and other Arab media, where it has become the gospel about American motives.

No Guardian readers in Britain will have seen the story unless they logged onto the net. But the online edition receives an astounding 10m hits a month and, for international readers, there is no distinction between the fish and chip paper and the .co.uk one. As this paper’s New York correspondent, the internet edition is all I have to go on.

A powerful editor of The New York Times just lost his job over the fabrications of Jayson Blair, a young newsroom protégé. Admittedly Blair lied deliberately, pretending to be all over America when he was actually at home in Brooklyn, but his little flights of fancy look trivial next to the casual anti-American distortions of so many newspapers.

The Wolfowitz story was too good to be true and too good to check. A freelance at The Guardian was so delighted with it that he went to the trouble of translating Wolfowitz from German into English, when he had spoken in English in the first place. And the German story was wrong anyway. No matter: another journalist turned it into the splash.

I’m told senior editors at The Guardian were too busy with exciting news about Tony Blair’s leadership pact with Gordon Brown at the Granita restaurant in Islington nine years ago to notice there had been a “massive cock-up”.

Emily Bell, managing editor of Guardian Online, said the mistake had nothing to do with the anti- war stance of the paper or many of its staff: “I don’t know what the politics of my writers or editors are.” But it is hard to resist the conclusion that the fallacy crept in because it fitted a pre-existing mindset about the war.

Gregory Djerejian, 30, is an American blogger (web logger) in London who runs a site called Belgravia Dispatch. A current affairs junkie, he took only minutes to do The Guardian’s job for it. “When I saw the headline, my first reaction was Paul Wolfowitz is too smart to say anything like that, so I did a quick Google search.”

Wolfowitz had in fact drawn a comparison between North Korea, teetering on the edge of economic collapse — which he described as “a major point of leverage” over its weapons programme — and Iraq. “The primary difference ... is that we had virtually no economic options in Iraq because the country floats on a sea of oil.” At no point did he state or imply that the war was a grab for oil.

A correction was up and running on Belgravia Dispatch hours before The Guardian got around to its own. “I don’t have a political agenda,” said Djerejian, “but I get a little offended by the constant conspiratorial agenda about the Americans.”