Ex-treasury secretary denies stealing papers to accuse Bush

The row between Paul O'Neill and the White House intensified yesterday as the former Treasury secretary denied he had made classified documents on Iraq available to the author of a critical tell-all account of his two years in the Bush administration.

Mr O'Neill said yesterday: "The truth is, I didn't take any documents at all," insisting that the 19,000 papers he made available to the author had all been approved by the Treasury's legal counsel.

Ron Suskind's The Price of Loyalty, describing the former Treasury secretary's experiences as a Bush cabinet member until he was sacked in December 2002, was an instant bestseller as it hit bookstore shelves yesterday. It is by far, the most embarrassing insider's account of the Bush administration yet, dissecting the President's uninterested and disconnected management style.

It also reveals how the Bush National Security Council (NSC) was focusing on how to get rid of Saddam Hussein at its first full session convened by Mr Bush on 30 January 2001; 10 days after he took office and more than seven months before the terrorist attacks against New York and Washington.

It confirms how Mr Bush consciously disengaged from the Middle East, putting the conflict between Israel and Palestine on the back burner at that NSC meeting, so as to concentrate on Iraq.

The Clinton administration had "overreached" on the Middle East "and it all fell apart," Mr Bush is quoted as telling the assembled NSC, adding: "We're going to tilt back towards Israel." The President then brushed aside concerns by Colin Powell, the Secretary of State, about possible "dire consequences" for the Palestinians if the US pulled back.

"Maybe that's the best way to get things back in balance," Mr Bush is said to have shrugged in reply. "Sometimes a show of strength by one side can really clarify things." In his television appearance yesterday, Mr O'Neill made some effort to pour oil on the troubled water, saying that, if he were still Treasury Secretary, he would have sought an investigation into the alleged misuse of secret documents; a step taken in his own case on Monday by his successor, John Snow.

He also said that he would have toned down some of his criticism of Mr Bush, notably the now-famous line that Mr Bush at cabinet meetings was "like a blind man in a room full of deaf people". But the Democrats vying for Mr Bush's job continued to make hay with the controversy.

The front-runner Howard Dean, Senator John Kerry and retired General Wesley Clark all seized on Mr O'Neill's claim of never having seen convincing evidence of Iraq's weapons of mass destruction, as proof of how the country had been tricked into going to war.