Suzanne Goldenberg

Washington: The Bush administration has scaled back its ambitions to rebuild Iraq from the devastation wrought by war and dictatorship and does not intend to seek new funds for reconstruction, it has emerged.

In a decision that will be seen as a retreat from a promise by U.S. President George Bush to give Iraq the best infrastructure in the region, administration officials say they will not seek reconstruction funds when the budget request is presented to Congress next month, the Washington Post reported on Monday.

The $18.4 billion allocation is scheduled to run out in June 2007. The move will be seen by critics as further evidence of the administration's failure to plan for the aftermath of the war.

A decision not to renew the reconstruction programme would leave Iraq with the burden of tens of billions of dollars in unfinished projects, and an oil industry and electrical grid that have yet to return to pre-war production levels.

Guardian Newspapers Limited 2004