The claim — quickly denied by Prime Minister John Howard — came on the first day of a parliamentary inquiry into the intelligence used by the government to justify sending 2,000 troops to fight alongside US and British soldiers in Iraq. It mirrors the scandal that has engulfed British Prime Minister Tony Blair's administration.

Andrew Wilkie, who quit as a senior intelligence analyst in March to protest the Australian government's support for war in Iraq, told lawmakers that information passed to the government had been distorted for political purposes.

"Sometimes the exaggeration was so great, it was clear dishonesty," he told the inquiry.

Wilkie referred to information sent to Howard from the Office of National Assessments, an agency that evaluates intelligence from all Australian and allied agencies.

"I will go so far as to say the material was going straight from ONA to the prime minister's office and the exaggeration was occurring in there, or the dishonesty was occurring somewhere in there," he said.

The British government has been under sustained fire over accusations it exaggerated intelligence reports to justify going to war. British weapons scientist David Kelly committed suicide after being revealed as the source of a British Broadcasting Corp. report that questioned the integrity of the government's case for war.

Asked if he was accusing Howard's office of "sexing up" intelligence — a phrase seized on by British tabloids — Wilkie replied, "Yes, it was sexed up."

Wilkie did not provide any documents to back up his claims.

In a speech to Parliament before fighting broke out in Iraq, Howard justified the war saying intelligence sources showed Baghdad had weapons of mass destruction and could give them to terrorists.

Experts scouring Iraq have so far failed to find such weapons, leading opposition lawmakers to use their control of the parliament's upper house, the Senate, to demand an inquiry into Howard's claims.

Earlier Friday Howard said the assessment made of Iraq's weapons capacity was justified "at the time." He called a press conference soon after Wilkie's testimony.

"I deny that absolutely," he told reporters in the southern city of Adelaide. "I don't know on what he bases those claims, if he has got evidence of that let him produce it, otherwise stop slandering decent people."

Howard said the ONA had "indicated" Wilkie had not had access to the relevant intelligence on Iraq.

The chiefs of at least three Australian intelligence agencies will have an opportunity to answer Wilkie's claims, but their testimony will be given in secret and cannot be published in the committee's report, due to be released on Dec. 2.

In testimony earlier Friday, Richard Butler, a former Australian ambassador to the United Nations and the UN's chief weapons inspector in Iraq from 1997 to 1999, told the inquiry Saddam's regime had trained terrorists at a camp just outside Baghdad.

But he did not believe Saddam would have given them weapons of mass destruction.

"I saw no evidence of Iraq giving over WMDs to non-state actors, to terrorist groups," he said.

Butler said there had been "great animosity" between Saddam's regime and al-Qaeda, the terror network led by Osama bin Laden. Butler said he had talked about that with Saddam's former deputy prime minister, Tariq Aziz.

"I would have been stunned if Saddam had wanted or would have allowed his WMDs to be given to al-Qaeda, for example," he said.