Remember how oil revenue was going to help pay for reconstruction?

Iraqis face the dire prospect of losing up to $200bn (£116bn) of the wealth of their country if an American-inspired plan to hand over development of its oil reserves to US and British multinationals comes into force next year. A report produced by American and British pressure groups warns Iraq will be caught in an "old colonial trap" if it allows foreign companies to take a share of its vast energy reserves. The report is certain to reawaken fears that the real purpose of the 2003 war on Iraq was to ensure its oil came under Western control.

The Iraqi government has announced plans to seek foreign investment to exploit its oil reserves after the general election, which will be held next month. Iraq has 115 billion barrels of proved oil reserves, the third largest in the world.

According to the report, from groups including War on Want and the New Economics Foundation (NEF), the new Iraqi constitution opened the way for greater foreign investment. Negotiations with oil companies are already under way ahead of next month's election and before legislation is passed, it said.

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Earlier this year a BBC Newsnight report claimed to have uncovered documents showing the Bush administration made plans to secure Iraqi oil even before the 9/11 terrorist attacks on the US. Based on its analysis of PSAs in seven countries, it said multinationals would seek rates of return on their investment from 42 to 162 per cent, far in excess of typical 12 per cent rates.

Two years ago today - when President George Bush announced US, British and Allied forces would begin to bomb Baghdad - protesters claimed the US had a secret plan for Iraq's oil once Saddam had been conquered.

In fact there were two conflicting plans, setting off a hidden policy war between neo-conservatives at the Pentagon, on one side, versus a combination of "Big Oil" executives and US State Department "pragmatists".

"Big Oil" appears to have won. The latest plan, obtained by Newsnight from the US State Department was, we learned, drafted with the help of American oil industry consultants.

Insiders told Newsnight that planning began "within weeks" of Bush's first taking office in 2001, long before the September 11th attack on the US.

BAGHDAD: Iraq's Industry Ministry plans to partially privatize most of its 46 state-owned companies as part of the government's plan to establish a liberal, free-market economy.

Later this year, the ministry is expected to launch a search for domestic and foreign partners in the private sector to jointly run companies in the petrochemical, cement, sugar, silk and heavy industry sectors.

Initially, the ministry plans to privatize around 10 small factories and companies which do not contribute greatly to the economy, such as those producing clothes and tires.

"We have plans to develop and pave the way for domestic and foreign investment in these sectors," said Mohammad Abdullah, acting industry minister.