The UN's nuclear watchdog has angrily accused American politicians of exaggerating the extent of Iran's nuclear programme and trying to discredit its inspectors.

In a letter given to journalists outside a board meeting of the International Atomic Energy Agency (IAEA) today, a senior official refuted a report released by the Republican-dominated House Intelligence Committee on August 23, which said that Iran would "not be satisfied until it poses a threat to the entire world".

The letter, addressed to Peter Hoekstra, the Republican chairman of the committee, accused the US congressmen of making a litany of misleading statements, as well as implying that the IAEA sidelined an inspector who believed that Iran is deceiving the body about the character of its nuclear ambitions.

In a move described by a spokeswoman as "setting the record straight" and reminiscent of disagreements between the IAEA and the Bush Administration in the run-up to the war in Iraq, the IAEA said that the congressional committee had released "erroneous, misleading, and unsubstantiated "information in its 29-page report.

The dossier openly challenged America's intelligence community, wary of failures before the September 11 attacks and then in Iraq, to make more aggressive assessments about Iran's intentions.

It carried a picture of the Iranian President, Mahmoud Ahmadinejad, addressing a "World without Zionism" conference on its front cover and urged CIA and Pentagon intelligence analysts to "not shy away from provocative conclusions or bury disagreements in consensus assessments".

Today's letter, signed by the IAEA director for external relations, Vilmos Cserveny, chastised Mr Hoekstra and his colleagues for portraying Iran as closer to producing weapons-grade uranium than the available evidence suggested.

The IAEA also responded to a claim in the congressional report that Chris Charlier, a senior weapons inspector, had been sacked for his distrust of the Iranian regime.

The IAEA "takes strong exception to the incorrect and misleading assertion... that the Director General of the IAEA decided to 'remove' Mr Charlier, a senior safeguards inspector of the IAEA for challenging Iran about 'deception regarding its nuclear program'", the letter stated.

"The report contains an outrageous and dishonest suggestion that such removal might have been from ’not having adhered to an unstated IAEA policy barring IAEA officials from telling the whole truth about the Iranian nuclear program,’" the letter said.

The congressional committee had concluded that the IAEA's decision not to send Mr Charlier back to Iran after alleged disagreements with Iranian officials "should give US policymakers great pause".

The leader of the Democrats in the US Senate, Harry Reid, seized on the IAEA letter in a wide-ranging attack on Republic foreign policy in Congress today, accusing the Bush Administration of endangering America by failing to engage in meaningful negotiations with countries like Iran and North Korea.

"The Bush Administration apparently believes talking is a sign of weakness," he said. "This aversion to diplomacy is very hard for me to understand. I believe it is a cop out."

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