Mr Annan, addressing a seminar on the United Nations and the media, said most of the money Saddam earned was by oil sold to Jordan and Turkey outside of the $67 billion UN programme.

Only countries like the United States and Britain had interdiction forces that could have stopped it.

But he said they “decided to close their eyes to Turkey and Jordan because they are allies.

” Annan said he understood the reason for it: no one had the money to compensate neighbours of Iraq for their losses under UN sanctions, imposed in mid-1990 after Iraq invaded Kuwait.

Under the oil-for-food programme, which began in December 1996 and ended in 2003, Saddam Hussein was allowed to sell oil to buy civilian goods to ease the impact of 1990 sanctions on ordinary Iraqis.

CIA weapons inspector Charles Duelfer found that corruption within the UN oil-for-food programme, such as inflated prices for goods shipped to Iraq, amounted to $17 billion.

But he said Iraq made most of his money, another $8 billion through kickbacks on oil exports outside of the programme.

“The bulk of the money Saddam made came after smuggling outside the oil for food programme,” Me Annan said.

“It was on the American and British watch” But he said this lapse was often ignored by the media and said he believed some in the US media would never produce a balance picture on ideological grounds.

“I sometimes bridle at press criticism that seems politically biased and ideologically inspired,” Mr Annan told the seminar.

“How often can you react and not be seen as someone who is oversensitive?” For example, he said the United Nations was criticized for wanting to let Iraq have spare parts for its oil industry.

Yet after the war, US and other officials were the first to acknowledge the dilapidated equipment.

Brian Urquhart, a former UN undersecretary general and author, said criticism of the world body was not new since its inception although it had now reached a fever pitch.

“There was always a faction in US politics which regarded the United Nations as a curse on humanity which had to be eliminated,” Mr Urquhart said.

Since the end of the 2003 war, Iraq has released lists and charts of oil vouchers and kickbacks by the Saddam Hussein government.

The lists are a veritable who’s who of political groups and individuals from whom the former Iraqi government wanted to buy influence while under UN sanctions.

Paul Volcker, the former US Federal Reserve Chairman, assigned by Annan to investigate the programme, has pointed a finger at Benon Sevan, the head of the UN programme, saying he steered oil contracts to friends in Egypt.

He also faulted Mr Annan for failing to investigate the potential conflict of interest in a contract awarded to a Swiss firm that employed his son and reported that a close aid shredded possibly relevant documents.—Reuters