WASHINGTON, Oct 26: The Bush administration launched its campaign to persuade President Pervez Musharraf to remove Dr A. Q. Khan from Pakistan's nuclear establishment as early as 2001, months before the Sept 11, terrorist attacks, The Washington Post reported on Tuesday.

The front-page, 5,000-word report details how this low-key but persistent effort by President George Bush and his closest ally, British Prime Minister Tony Blair, led first to Dr Khan's removal from Pakistan's nuclear establishment and then to his home arrest in February this year.

The Bush administration's concerns about Pakistan's nuclear programme increased after Sept 11 when they learned that two Pakistani nuclear scientists, Sultan Bashiruddin Mahmood and Chaudhary Abdul Majid, had met Osama bin Laden a month before the terrorist attacks. Both scientists had failed US polygraph tests about the purpose of their trip, the report said. The Post says that President Bush worked quietly, 'further from public view,' to penetrate and close 'the first private marketplace of the atomic age: Abdul Qadeer Khan's Pakistan-based distribution network.'

The report claims that President Musharraf retired Dr Khan on March 27, 2001 after the US government convinced him that Dr Khan was 'leading a secret life.' By the time Mr Bush arrived in office, the CIA and Britain's Secret Intelligence Service knew that Dr Khan was at the centre of an international proliferation network supplying uranium equipment to Libya.

Dr Khan not only dealt in designs but also had begun mass production of components, the report said.

"The US government had a dilemma. The picture was alarming, incomplete and dependent on sensitive intelligence sources. And the man at the centre of suspicion had a stature in Pakistan that easily exceeded Gen Musharraf's." The Bush administration sent envoys to Islamabad with deliberately opaque words of warning. Something was amiss at the Khan Research Laboratories, they said, and its secrets were being marketed abroad. One official said Assistant Secretary of State Robert Einhorn told the three-star general overseeing Pakistan's strategic nuclear force: "Either you are not on top of this or you are complicit. Either one is disturbing." US officials did not mention Dr Khan by name. They feared a confrontation that could break Gen Musharraf's grip on power, said Greg Thielmann, who was director of strategic proliferation and military affairs at the State Department's Bureau of Intelligence and Research until 2003. And, in the worst-case scenario (it could) bring about a "fundamentalist government in Pakistan that had nuclear weapons."

Dr Khan's retirement, however, did not block his access to the labs and his Network's global sales flourished, the report claims. By the second half of 2001, the CIA and British intelligence had concluded that Dr Khan had more than one customer, but they could identify only Libya.

After the Sept 11 attacks, Deputy Secretary of State Richard Armitage was preparing a list of "non-negotiable" demands for Pakistan's military intelligence chief, Mahmud Ahmed. The administration briefly debated: Should Khan be on the list?

Feroz Hassan Khan, who was then a director in the Pakistan Army's strategic plans division, told the Post that "there would have been a positive response" if Mr Armitage had used that moment to demand action against the nuclear black market. But Mr Bush's national security team believed the United States could push Gen Musharraf no harder.

In March 2002, British and American intelligence services concluded that Dr Khan had moved his base outside Pakistan, that he controlled the business through associates in Dubai and had "established his own production facilities, in Malaysia. The British government reported in July 2002 that Dr Khan might be selling the means "to build nuclear warheads."

The Blair government - according to the Post - argued that it was time to confront Pakistan about Dr Khan and stop the operation of his network. The Bush administration disagreed.

Dr Khan continued moving freely abroad, evading nominal restrictions. On a trip to Beijing, one senior Pakistani diplomat told the Post, Chinese authorities "took me aside, said they knew it would be embarrassing, but A.Q. Khan was in China and bribing people, and they wanted him out." The diplomat said Pakistan confiscated a false passport, but Khan kept traveling.

The report claims that in 2001 and 2002, Dr Khan's network delivered tens of thousands of gas centrifuge parts that brought North Korea to the threshold of unlimited bomb production.

In 2003, the International Atomic Energy Agency reported that Dr Khan was also supplying Iran.

One year later, the Bush administration received 500 tons of nuclear equipment from Libya. It was Libya's entire nuclear weapons programme, bought over a decade for $100 million from Dr Khan. According to the Post, Iran was Dr Khan's first customer, North Korea his second and Libya his undoing.

What troubles US and British officials today is the evidence of a fourth customer yet unknown, the Post says.

One key clue is a ship that never arrived. Not long before Libya's disarmament, scientists in Tripoli placed an order for additional centrifuge parts. Because Dr Khan's network operated through intermediaries, the Libyans do not know who was going to make the components, or where. Investigators in Washington, London and Vienna said they have been unable to learn.

Most troubling for American and British investigators, the Post says, are orders, invoices and manifests found in Dr Khan's overseas records describing shipments that cannot be accounted for by known customers. US and IAEA investigators have several suspects for a "fourth customer" - officials named Syria, Egypt, Sudan, Saudi Arabia and Kuwait in approximate order of interest - but no substantial evidence has surfaced, the report said.