In comments to Al-Jazeera television, Mr Shaalan accused Chalabi of defaming him and the ministry, but didn’t elaborate.

“We will arrest him and hand him over to Interpol. We will arrest him based on facts that he wanted to malign the reputation of the defence ministry and defence minister,” Mr Shaalan told the television network.

An INC spokesman says the charge probably comes from statements Mr Chalabi made previously to London-based newspaper Asharq al-Awsat.

“He (Mr Chalabi) did not accuse anyone of anything. He (just) said that hundreds of millions of dollars have been moved by plane (and was presumably flown out of Iraq) and asked the Iraqi state to investigate,” the spokesman says.

The amount that was allegedly removed from Iraq has been estimated at around A$650-million.

In response to the alleged defamation, Mr Shaalan added that Mr Chalabi would be handed to authorities for his conviction-in-absentia by a Jordanian court in 1992, allegedly for embezzling millions from Petra Bank whose 1989 collapse shook Jordan’s political and financial system.

Mr Shaalan also blamed Mr Chalabi for dismantling the Iraqi army and police forces after the US-led invasion.

A cousin and rival of interim Prime Minister Iyad Allawi, he was not immediately available for comment.

Mr Chalabi is a champion of the post-war program that sought to keep anyone associated with Saddam’s Baathist regime from positions of authority in post-Saddam Iraq.

His INC party has emerged as a power broker in the main election list for the country’s Shi’ite majority in the January 30 ballot, with Mr Chalabi as a contender for the post of prime minister.

He is a former Pentagon favourite, but fell out of favour over suspicion of leaking intelligence to Iran.

Having founded and run the Petra Bank while living in Jordan, Mr Chalabi has previously denied any wrongdoing there.

He says it is a conspiracy orchestrated by the ousted Iraqi regime of Saddam Hussein and the Jordanian government, having filed a suit against the Jordanian ruling in a US court last August.

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