George Bush poured fuel on the flames of the Iraq contracts dispute yesterday with a sneering dismissal of a suggestion by the German Chancellor that the decision to bar Germany, France Russia and Canada from bidding might violate international law.

"International law? I'd better call my lawyer," the American President joked in response to a reporter's question at the White House.

Gerhard Schröder had spoken earlier after a meeting in Berlin with Kofi Annan, the UN secretary general. Mr Annan called the decision by Paul Wolfowitz, the Deputy Defence Secretary, "unfortunate" and likely to damage attempts to rebuild transatlantic ties bruised by disagreement over the war. The EU is examining the legality of the US moves to stop countries that had not participated in the war from bidding for the $18.6bn (£10.7bn) of contracts, on vague "national security" grounds.

Democrats seized on the episode as further evidence of Bush diplomatic blundering. "How do we get a coalition together when we're putting it out on a government website that a country like Canada is a national security risk to the United States?" Marty Meehan, a Democratic member of the House Armed Services Committee, said.

© 2003 Independent Digital (UK) Ltd

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