Crucial doubts about Iraq's ability to produce chemical weapons were withheld from two inquiries which examined the Government's case for war.
Lord Hutton's investigation into the death of David Kelly and Parliament's Intelligence and Security Committee, which monitors the intelligence services, were not told that information which helped Tony Blair claim that Saddam Hussein posed a "serious and current" threat had already been discredited and withdrawn by MI6.
The disclosure put new pressure on John Scarlett, the former chairman of the Joint Intelligence Committee (JIC), who is being urged to resign from his new post as head of MI6 following the criticism of the pre-war intelligence in the Butler report published on Wednesday.
Three out of five key sources for the most sensational claims in the Government's September 2002 dossier on Iraqi weapons proved to be so untrustworthy that MI6 (the Secret Intelligence Service) officially withdrew their contributions. According to paragraph 405 of the Butler report, "in July 2003 ... SIS withdrew the two reports [about ongoing production of chemical weapons] because the sourcing chain had by then been discredited". The Hutton inquiry began taking evidence in August 2003.
The withdrawals fatally undermine the case for war and would undoubtedly have had a significant bearing on the Hutton report. But they were not revealed to Lord Hutton by any of the government witnesses, who included Mr Blair, Geoff Hoon, the Secretary of State for Defence, Mr Scarlett, and Sir Richard Dearlove, the outgoing head of MI6. All stood by the claims in the dossier, although it is not clear how many were aware that the intelligence had been withdrawn.
Dr Brian Jones, a leading expert on chemical and biological weapons at the Defence Intelligence Staff who was not allowed to see the new intelligence, said last night: "This is very significant. Either the Prime Minister knew, when he gave his evidence to the Hutton inquiry, that the information from this source had been withdrawn in July 2003, in which case the question must be asked why didn't he mention it? Or, he was not told. In that case, surely, he must ask why he wasn't told, and whose decision was it not to tell him."
The discredited informants had provided "intelligence" that formed the basis for some of the most alarming charges in the dossier - that Saddam had an active chemical and biological weapons programme. It is also at the heart of the claim that Iraq could deploy such weapons "within 45 minutes".
Lord Butler found that the two sources whose credibility is deemed to remain intact produced far less alarming reports about Iraq's supposed capabilities. The discredited information was the only material at the time suggesting that Saddam had "an ongoing chemical production facility", intelligence sources said.
The intelligence was withdrawn by MI6 in July 2003, after agents visiting Iraq found the secondary "sub-source", who had supposedly supplied their main source with intelligence, denied ever doing so. The Butler report concluded that "the two reports from this source, including one which was important in the closing stages of the production of the Government's September  dossier, must now be treated as unsafe".
The fact that the intelligence had been withdrawn did not emerge in the Hutton inquiry, which began in August 2003. It also appears that the Intelligence and Security Committee (ISC) was not told, even though it was taking evidence about Iraq's weapons in July and August. In a report in September, the committee backed the Government's case that Iraq had an active WMD programme. As late as February this year the Government was still insisting that the dossier provided a balanced view.
Mr Blair will be questioned about the new controversy in a Commons debate next week.
Michael Ancram, the shadow Foreign Secretary, said: "This is yet another example of Blair's statements not matching the reality of the intelligence. This is yet another unanswered question the Prime Minister should come clean about ... This is yet another body blow to the Prime Minister's waning credibility."
Sir Menzies Campbell, foreign affairs spokesman for the Liberal Democrats, said: "Those who knew this information had been withdrawn - and who had previously provided it as being authentic and supportive of the dossier - had an obligation to tell others whose judgements were affected by it, as soon as it came to their notice that it couldn't be relied upon." He was "very surprised" that the ISC was not told and suggested that it might have reached a different conclusion.
He added: "No attempt was made either before that committee or indeed, as I understand it, before the Hutton inquiry, to say 'look we had this piece of information, it was very important from the point of view of the dossier but we have had to withdraw it now because we cannot regard it as reliable'. That inevitably inhibits and undermines the work of Parliament's scrutiny committee of the intelligence services."
On each of the three occasions where intelligence was withdrawn, MI6 told the JIC and Mr Scarlett of its decision. According to MI6, it was up to the JIC to pass this on to Downing Street. The Cabinet Office refused to comment yesterday on whether this was done, or when MI6 informed the JIC.