The revelations in Saturday's Sydney Morning Herald newspaper suggest that America's staunchest allies in the invasion of Iraq knew beforehand that the adventure would backfire.
The paper reported that the Joint Intelligence Committee (JIC) provided British Prime Minister Tony Blair with evidence debunking key arguments used by the United States, Britain and Australia to justify launching military action against Baghdad.
The paper said that under intelligence-sharing arrangements, Australia receives JIC reports as a matter of course.
"The JIC assessed that al-Qaida and associated groups continued to represent by far the greatest terrorist threat to Western interests, and that threat would be heightened by military action against Baghdad," a British parliamentary report said, following a review of secret assessments by British intelligence chiefs.
Risk of transfer
The JIC assessment said there was no evidence Saddam Hussein wanted to use chemical or biological weapons in a "terrorist" attack.
"In the event of imminent regime collapse there would be a risk of transfer of such [WMD] material whether or not as a deliberate regime policy"
UK parliamentary report
"However it judged that in the event of imminent regime collapse there would be a risk of transfer of such material whether or not as a deliberate regime policy," the parliamentary report said.
The intelligence contradicts statements made by Prime Minister John Howard in an address to the nation when committing to troops to Iraq.
"Far from our action in Iraq increasing the terrorist threat, it will, by stopping the spread of chemical and biological weapons, make it less likely that a devastating terrorist attack will be made against Australia," Howard said at the time.
The prime minister's office declined to comment on the newspaper report when contacted on Saturday.
Australia was one of the United States' staunchest allies in its stance against the Iraqi regime, as was Blair who has come under intense pressure in recent months amid claims his office "sexed up" claims about Iraq's weapons capabilities.