Ahmad Chalabi, a member of the Iraqi Governing Council and one-time friend of the Pentagon, saw his home and offices raided today by Iraqi police and American troops. Richard Beeston, Times Diplomatic Editor, left, reports from Baghdad.

"The United States insists that today's raid on Mr Chalabi's home and offices were conducted by the Iraqi police and had nothing to do with them.

"This claim was made even though the Iraqi police were accompanied on the raid by US military police and plainclothes US security officers.

"The truth is that relations between America and Mr Chalabi, who was for years the darling of US neo-conservatives and the Pentagon, have been deteriorating since the invasion in March last year.

"There are a number of reasons for this. Before the invasion, Mr Chalabi convinced Washington that Saddam Hussein was hoarding stockpiles of biological and chemical weapons, a claim that has proved so far to be false.

"Mr Chalabi also told the US that he was a popular figure in Iraq and would be a shoo-in as the new, pro-Western leader of the country once Saddam had been deposed.

"In truth, few people had heard of him, largely because he spent many years in exile living in London, and he was not that popular with those that had.

"He also said that US forces would be welcomed with open arms by the Iraqi public and treated as liberators. The continuing insurgency has given the lie to that claim as well. Against this backdrop, the relationship has deteriorated even further.

"Mr Chalabi was involved in the comprehensive de-Baathification campaign, in which he removed members of Saddam's Baath party from positions within government and in other key professions.

"Paul Bremer, the top US administrator in Iraq, was forced to reverse the policy when it became apparent that Mr Chalabi had pursued the campaign far too vigorously.

"Mr Chalabi had teachers, civil servants and many other key workers removed, although many of them had joined the Baath party under Saddam's rule because it was the only way to secure work.

"Mr Chalabi also disagreed with Mr Bremer over who should lead the investigation into the scandal over the Oil-for-Food programme. He blotted his copybook by commissioning an accountancy firm to look into the alleged fraud, with which US authorities later discovered he had close contacts.

"Mr Chalabi caused further frustration by criticising the US military for not cracking down hard enough on the Sunni insurgency in Fallujah. He then attacked the military for being too heavy handed against the Shia rebels in Najaf and Kerbala.

"The straw that broke the camel's back however came earlier this week, when the Pentagon announced that it would stop payments to Mr Chalabi's Iraqi National Congress (INC) party, which has received hundreds of thousands of dollars each month for years.

"Mr Chalabi was not arrested during the raid, but he said later that he would cut all ties with the US and suggested its troops should leave Iraq now.

"I visited Mr Chalabi's Chinese pagoda-style villa in the upmarket al-Mansour district of Baghdad today. The doors had been kicked in and Mr Chalabi, who said he had been asleep when the house was raided, said his computers had been taken.

"Paradoxically, Mr Chalabi's fall-out with America may actually work in his favour. He has been regarded by many Iraqis as little more than a CIA stooge since arriving here. Now that their relations have ended, that charge no longer applies."

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