But the Iraqi politician, who fled Iraq in 1958 to return in 2003 as a potential national leader, vowed on Sunday to fight what he called the "outrageous" charges.

Specific accusations made by Judge Zuhair al-Maliki include counterfeiting and financial irregularities.

His nephew, Salim Chalabi - head of the Iraqi tribunal trying Saddam Hussein - is also to be arrested over the murder of the director general of the finance ministry, Haitham Fadil.
 
"They should be arrested and then questioned and then we will evaluate the evidence, and then if there is enough evidence, they will be sent to trial," al-Maliki said.

Faces death penalty

If convicted, Salim Chalabi, 41, could face the death penalty - which was restored by Iraqi officials on Sunday, the judge added.

Any sentence for Ahmad Chalabi would be determined by the trial judges.

Both men, who were out of the country on Sunday, denied the charges and said they were politically motivated. 
 

"There is no case here and I will go to meet those charges head-on ... I have been fighting Saddam for many years and we survived that"

Ahmad Chalabi,
Interim government member

Salim Chalabi called the accusations "ridiculous", while his uncle Ahmad said the charges were "outrageous" and "manufactured lies".
  
Speaking from Tehran to a US broadcaster, Ahmad said: "There is no case here and I will go to meet those charges head-on ... I have been fighting Saddam for many years and we survived that."

He left Iraq in 1958 to return in 2003 as a prime candidate for the interim presidency.

His nephew has served as a legal adviser to the interim Iraqi Governing Council and was a member of the 10-member committee framing the basic transitional law for the new interim government.

End of Chalabi?

Iraqi police and US troops had already raided Ahmad's Baghdad offices in May.

Washington also cut off its $340,000 a month funding of his Iraqi National Congress party.

But it still may be too soon to write off his political career.

He had already been convicted in absentia for multi-million dollar bank fraud in Jordan but still managed to obtain favour at the Pentagon and a leading role in Iraq's interim government.

However, in recent months, Chalabi has repeatedly criticised US policy in Iraq, insisting Washington hand Iraq control of its own oil revenue and condemning the transfer of power in June as meaningless.