AMERICA’S diplomatic rift with Russia widened yesterday as Moscow insisted that sanctions against Iraq stay in force until United Nations weapons inspectors have declared the country free of weapons of mass destruction.

At the same time Richard Perle, a leading adviser to the Pentagon, told a Russian newspaper that the country’s multibillion-dollar oil deals with Saddam would probably be annulled. Russia has an estimated $52 billion (£33.3 billion) tied up in deals with Iraq under the sanctions regime and is owed at least $8 billion.

Moscow has rejected suggestions from the Bush Administration that it should write off the money owed in a show of goodwill to the Iraqi people.

The US is keen to end sanctions against Iraq to kickstart the country’s economy, but has faced opposition from the anti-war grouping of France, Russia and Germany, which fears that the immediate lifting of sanctions could legitimise the war and lose them valuable contracts.

Washington has made clear that any historic deals with the former regime will not continue. Mr Perle reaffirmed that view in an interview in the Kommersant newspaper yesterday. “It is highly likely that all previous deals with Russia will be declared null and void,” he said.

Russia had made a mistake by joining forces with France and Germany, he said. “The Russian Government backed a loser. This will undoubtedly seriously damage Russian interests.”

The failure of coalition forces to uncover chemical or biological weapons in Iraq has been seized on by Russia as evidence that the war against Iraq was unwarranted.

An unnamed official in the Russian Foreign Minstry told the Tass news agency that the weapons inspectors should be allowed back in to Iraq to finish their work. “This could be done within a couple of weeks as it is obvious that there are no such weapons there.”

Russia hopes that by delaying the lifting of the sanctions it may strike a deal to save at least an economic toehold in Iraq, despite likely losing many of its contracts.

Mr Perle kept his most scathing remarks yesterday for President Chirac of France. “Do you really think the new Iraqi Government is going to invite Jacques Chirac?” he said. “Chirac went too far in his aim of opposing the US and the coalition. I don’t think the majority of Americans are ready to forget that. Chirac had a choice: to come on to our side or Saddam Hussein’s. He chose Hussein.”

Times Recommends

• Fish and chip shops ‘selling cobbler as cod’
• T in the Park festival at Kinross
• How to get Madonna’s Thighs