SEYMOUR HERSH: Well, there's, needless to say, on the top you've got a lot of happiness. You've got the President and the Vice-President, Mr Cheney, and you've got the Secretary of Defense, and everybody just loves each other and everybody agrees 100% with what's going on and once you get below that top level, which is the level that makes the decision in this country, there's a lot of people that aren't that happy about it, obviously, because a lot of people wonder, you know, where we are headed, you know, is Iraq saint low on the way to Berlin.

You know, what are we doing here? Are we starting some big process? Is Syria and Iran next? So the amount of dissatisfaction below the top level is acute and particularly inside the intelligence community.

MARK DAVIS: But this is pretty - almost unprecedented, the level of information that's coming out. Of course journalists like you are only as good as your sources. Has there been another period where so many people have actively come out from within a very conservative intelligence community?

SEYMOUR HERSH: Yeah, I would say in Vietnam - I was around in Vietnam - and for a lot of reasons - when you have a wrong policy that doesn't make sense to people and when you're not telling the truth about the information that's available, a lot of people on the inside, you know, this is a bad market, bad economy, and you know a lot of people don't have the courage to stand up - you know, wife, children, mortgage and all that, so they expiate and they talk to the press.

More and more people are saying more and more things to reporters. We see it here in America. We certainly saw it in England where someone on the inside gave away a few secrets at a critical time against Mr Blair, and so I think in the next few months there's going to be more stuff tumbling out about what really happened.

How did we get to where we thought everything would be just hunky dory once we went into Iraq. We'd find all the weapons and everybody over there would welcome us and we'd have peace.

MARK DAVIS: You've written specifically about the Office for Special Plans. What was so unusual about the formation of that group and indeed, why shouldn't a President set up such a group?

SEYMOUR HERSH: One of the things that we operate in the United States is with a great deal of misinformation and disinformation about what our President knows, and when and where, but assuming he knows, the office was set up by Rumsfeld, the people in the Pentagon, the ideologues - and Rumsfeld is part of them and you know some of the names - Richard Pearle and Wolfowitz - the people that have been saying for 10 years "We've got to go after Saddam", the day after 9/11 were talking about Iraq.

It didn't matter whether there was no intelligence linking Iraq to what happened in New York and in the Pentagon, it just didn't matter. And so they set up a special unit because they couldn't get the intelligence they wanted out of CIA and the other intelligence agencies. So I think they deliberately and purposefully they set up their own intelligence unit to give them the kind of intelligence they want and it's...

In this world, Mark, let me tell you something, in the world of intelligence you don't have to be - in your country and my country, everywhere, intelligence is there to please the masters. That's one of the problems. But the idea that you would go to war with information that came within a small unit that was set up by people whose ideology said that the CIA doesn't really understand what's happening, only we know, only we understand, we few people together, a 'cabal' is what I call them in one of my articles.

And then the other problem you have in America, of course, that makes this so much more dangerous isn't the inability of me and my colleagues to learn everything, but it's the lack of an opposition. Bush is very competent, let everybody understand this is not some - he may not have a lot of information but he's very shrewd and tough and he's used 9/11 and the events of terrorism to build his case.

MARK DAVIS: Well you've spoken of how this new intelligence group gave Rumsfeld and Wolfowitz exactly what they wanted to hear, whether it was right or wrong. Do you have any specific examples of that?

SEYMOUR HERSH: I've seen a lot of paper that indicated right after 9/11 people involved inside the government who were fellow conservatives, neo-conservatives, began writing papers saying there's no difference about terrorism on the inside.

Terrorism everywhere is the same. In other words, a terrorist in the Muslim brotherhood is the same as a terrorist in al-Qa'ida is the same as a terrorist inside Chechnya. They're all the same. They all have the same purpose.

So the purpose was to convince the American leadership you don't have to worry about the fact that you're not finding evidence of al-Qa'ida inside Iraq. There's a general bond and an understanding of all terrorist groups. I've also seen a lot of papers in which a man that should be pretty well known to some of your audience - Ahmed Chalabi, the leader of the - the main leader of the Iraqi opposition in exile - the INC it's called.

Gee, wow, right after 9/11 all of a sudden Chalabi came up with a lot of people who were involved in training al-Qa'ida inside Iraq at special training sites. And in putting together stockpiles of chemical and biological and even nuclear warheads, not necessarily bombs but fissile material, dirty bombs.

And all of us, my colleagues in the press, we bit so hard on that stuff, it was funnelled through the Pentagon, the Defence Intelligence Agency, which was very closely monitored, obviously, by the men running the Pentagon, would produce secret reports, interviews, with some of these defectors, with Chalabi's people providing the translation from Arabic into English.

It would then be leaked to newspapers and the newspaper I worked with for years, the 'New York Times' ran many of these. And the CIA would see these intelligence reports classified even before they were leaked to the press. They would go find the person, with their own interpreter, would then tell him what he allegedly said and the defector would say, "No, I never said that." And then they would write their own report, also classified, contradicting the first one.

This is inside the intelligence system. Of course the first one, from the INC, would be leaked to the press, the second one, written by the CIA, never saw the time of day because it was classified. So you had this deliberate misuse.

MARK DAVIS: I think one of the examples you gave of that was the 30,000 litres of anthrax that George Bush claimed Saddam Hussein had.

SEYMOUR HERSH: One of the people was - that was one of the allegations he also made. Also talked about enormous tunnels being built under the - one of the hospitals in downtown central Baghdad in which they were doing biological work, none of this stuff could be found by the inspectors even before the war.

MARK DAVIS: Some of this information subsequently embarrassed Colin Powell and George Bush and to an extent our own Prime Minister, particularly to do with the links to al-Qa'ida and Iraq's nuclear capacity.

How do you get a situation where their advisers allow them to make public statements about material they know is going to be readily disproved, either now or a few months down the track?

SEYMOUR HERSH: Well to do otherwise, to stand up and say, you know, "Oh my God there's gambling on the premises!" that this isn't right, would cost somebody, would have cost somebody his job, I'd say, before the invasion. You were either in or out.

Remember President Bush kept on telling the rest of the world "You're either with us or against us". So on the inside it became known - I'm told, since Powell has so much integrity there was a tremendous pressure on him to get with the team and he was literally told, "You're either with it or you're without it," earlier this year and he then joined the team, I think, to his ever-lasting mortification.

You used the word 'embarrass'. I don't know. They should be embarrassed. I don't see any sign that George Bush and even Powell publicly say to the American people anything but a lack of embarrassment or apology. What they say is "Oh don't worry, we'll find it."

MARK DAVIS: I guess this is a very pertinent point in America at the moment, both politicians and the public seem pretty unmoved by this revelation. Does this surprise you?

SEYMOUR HERSH: Oh my God, yes. You know you mentioned that I'd written a lot of stories being critical about some of this intelligence and some of the, frankly, lying that was going on and, you know, to have them thud around sort of emptily - not in Europe, and not in the Pacific - the stories I wrote had a tremendous amount of bounce there - but inside my own country it was very slow going. It took weeks before some of that stuff, other people began to work on it.

MARK DAVIS: I saw a quote from you recently almost defending yourself saying that you are as 100% red-blooded American as Donald Rumsfeld is. Why is it necessary for you to make a comment like that, rather an unusual one?

SEYMOUR HERSH: Well it is. I have to remind people that it's just as American to be in your face as it is to go along. I think look, the answer is that George Bush has really dominated the political scene here and dominated the press.

The Pentagon's been able to spin America, to tell whatever story they want, we've been lied to by our own people deliberately and maliciously, and that's a very hard story to get to but I can tell you it's true. They did not correct the record. They thought in some way, some lofty philosophical way, that it's OK for the leadership of America, the men who really understand it, to tell white lies to the American people.

MARK DAVIS: You've been dealing with matters of intelligence and the US Government for more than 30 years, do any of these recent events really surprise you?

SEYMOUR HERSH: Yeah. They scare the hell out of me. After 9/11 the Administration made no move to curb any freedom of an American citizen. What they did is they've cracked down brutally on anybody who's a foreigner, anybody here with a visa, anybody who is not an American, anybody coming to America and they have been throwing away the rule book, locking up foreign citizens, locking up visitors if they think they have any basis, without any due process.

It's very un-American. It's been a huge change. It hasn't made any impact on my life. I'm not worried at all about me. You know, I'm a citizen. All they can do is - if you remember the name, Richard Pearle called me a terrorist. They can do that, but you know, what they've forgotten is that one man's terrorist, of course, is another man's freedom fighter.

MARK DAVIS: Richard Pearle called you a terrorist, you say?

SEYMOUR HERSH: Uh-huh, yeah, after one of my stories in which I - Richard Pearle is sort of the eminent squeeze of this issue. He's the intellectual leader, I'd say it's fair to say, of the neo - conservatives, but he also was in business.

The reason he stayed out was he wanted to be in business and I wrote a story rather embarrassing to him earlier this year about trying to get - talking to Saudis about whom he's castigated that kingdom repeatedly in his life and yet he's talking to them to try to raise money for a private business - $100 million.

So the story was embarrassing and he stepped down as chairman of the board, but stayed on the board, and then called me in public a terrorist, which is sort of a bizarre way to respond to legitimate reporting.

MARK DAVIS: We've had our first terrorist appear on the program. So thanks for joining us again, Seymour Hersh.