A disagreement has broken out at a senior level within the Bush administration over a new government that the US is secretly planning in Kuwait to rule Iraq in the immediate aftermath of the overthrow of Saddam Hussein.

Under the plan, the government will consist of 23 ministries, each headed by an American. Every ministry will also have four Iraqi advisers appointed by the Americans, the Guardian has learned.

The government will take over Iraq city by city. Areas declared "liberated" by General Tommy Franks will be transferred to the temporary government under the overall control of Jay Garner, the former US general appointed to head a military occupation of Iraq.

In anticipation of the Baghdad regime's fall, members of this interim government have begun arriving in Kuwait.

Decisions on the government's composition appear to be entirely in US hands, particularly those of Paul Wolfowitz, the deputy secretary of defense. This has annoyed Gen Garner, who is officially in charge but who, according to sources close to the planning of the government has had to accept a number of controversial Iraqis in advisory roles.

The most controversial of Mr Wolfowitz's proposed appointees is Ahmed Chalabi, the head of the opposition Iraqi National Congress, together with his close associates, including his nephew. During his years in exile, Mr Chalabi has cultivated links with Congress to raise funds, and has become the Pentagon's darling among the Iraqi opposition. The defense. secretary, Donald Rumsfeld, is one of his strongest supporters. The state department and the CIA, on the other hand, regard him with deep suspicion.

He has not lived in Iraq since 1956, apart from a short period organizing resistance in the Kurdish north in the 1990s, and is thought to have little support in the country.

Mr Chalabi had envisaged becoming prime minister in an interim government, and is disappointed that no such post is included in the US plan. Instead, the former banker will be offered an advisory job at the finance ministry.

A senior INC official said last night that Mr Chalabi would not countenance a purely advisory position. The official added: "It is certainly not the INC's intention to advise any US ministers in Iraq. Our position is that no Americans should run Iraqi ministries. The US is talking about an interim Iraqi authority taking over, but we are calling for a provisional government."

The revelation about direct rule is likely to cause intense political discomfort for Tony Blair, who has been pressing for UN and international involvement in Iraq's reconstruction to overcome opposition in Britain as well as heal divisions across Europe.

The Foreign Office said last night that a "relatively fluid" number of British officials had been seconded to the planning team.

Last week Colin Powell, the US secretary of state, told Congress that immediately after the fall of President Saddam's regime, the US military would take control of the Iraqi government.

His only concession was that this would be done with the "full understanding" of the international community and with "the UN presence in the form of a special coordinator".

© Guardian Newspapers Limited 2003

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