"With respect, your honour, I plead not guilty," Libby told federal Judge Reggie Walton when asked how he would plead on the charges during a 10 minute arraignment in Washington.
Cheney and other top officials could be called to testify in the trial which is likely to keep the spotlight on the Bush administration’s case for war on Iraq.
Libby resigned last week as Cheney's longtime chief of staff after he was indicted for obstructing justice, perjury and lying.
The charges followed a two-year probe into the leak of covert CIA operative Valerie Plame's identity.
Legal team appointed
Hours before his arraignment Libby brought in prominent criminal defence lawyer Theodore Wells, according to court documents.
Lawyers say Rove could still be
charged in the case
Wells, who is known for his trial work, has defended former agriculture secretary Michael Espy, former labour secretary Raymond Donovan, former senator Robert Torricelli and financier Michael Milken. He also brought in Washington lawyer William Jeffress, who is known for white-collar criminal defence work.
Plame's identity was leaked to the media in July 2003 after her husband, former diplomat Joseph Wilson, accused the Bush administration of twisting intelligence to justify the war in
At Libby's arraignment, the federal judge handling the case, Reggie Walton, could set a schedule for the filing of motions and possibly a trial date.
Meanwhile before any trial, Libby could still try to cut a deal with special counsel Patrick Fitzgerald on lesser charges, lawyers involved in the case said.
Blow to Bush
President George Bush's top political adviser Karl Rove was not indicted last Friday although lawyers involved in the case said he remained under investigation and may still be charged.
"With respect, your honour, I plead not guilty"
Vice President Dick Cheney's former top aide
Rove's attorney Robert Luskin would neither confirm nor deny any contacts with Fitzgerald since Libby's indictment.
Fitzgerald is expected to inform Rove of his decision in coming weeks, lawyers said.
Libby's indictment was a damaging blow to the White House, which was already reeling from the mounting US death toll in the Iraq war, the bungled response to Hurricane Katrina and the withdrawal of the president's US Supreme Court nominee Harriet Miers, under fire from Bush's conservative power base.
On the eve of the arraignment, White House national security adviser Stephen Hadley praised Libby as "a fine person" and said he would be missed.
Fitzgerald's investigation showed both Rove and Libby spoke to reporters about Wilson's wife despite initial denials by the White House.
A public trial could shed light on
Cheney's role in the leak case
Democrats have called on Bush to fire Rove, and Republican Senator Trent Lott of Mississippi has questioned whether Rove should retain his policy-making role at the White House. The White House has rebuffed calls for a staff overhaul.
The indictment showed Libby began seeking information about Wilson and his wife in late May 2003, some six weeks before Plame was identified publicly in a 14 July 2003 newspaper column by Robert Novak.
Libby played a major behind-the-scenes role in building the case for the Iraq war.
As part of his defence strategy, Libby's lawyer said his client was expected to argue any incorrect information he provided to federal investigators or the grand jury resulted from lapses in memory, rather than intentional lies.
In addition to dragging top White House officials into a time-consuming legal battle, a public trial could shed light on Cheney's role in the leak case.
According to the indictment, Libby learned from Cheney himself on 12 June 2003 that Wilson's wife worked in the CIA's counter-proliferation division.