Sir John Chilcot opens the inquiry as protesters demand to know who was responsible for taking Britain to war in Iraq. Source: Press Association Press Association

Tony Blair's government knew that prominent members of the Bush administration wanted to topple Saddam Hussein years before the invasion but initially distanced itself from the prospect knowing it would be unlawful, it was disclosed at the Iraq inquiry today.

British intelligence also dismissed claims by elements in the US administration that the Iraqi leader was linked to Osama bin Laden, it heard.

Evidence given at the opening day of the inquiry, chaired by the former top civil servant Sir John Chilcot, painted a picture of a Whitehall slowly realising the significance of George Bush's election in November 2000 on US policy towards Iraq.

Even before Bush's administration came to power an article written by his then national security adviser, Condoleezza Rice, warned that "nothing will change" in Iraq until Saddam was gone, Sir Peter Ricketts, a former chairman of the joint intelligence committee (JIC) and now the Foreign Office's top official, told the inquiry.

"We were aware of these drumbeats from Washington and internally we discussed it. Our policy was to stay away from that part of the spectrum," added Sir William Patey, then head of the Middle East department at the Foreign Office.

He revealed that in late 2001 – following the 9/11 attacks on the US – he asked officials at the ministry to draw up an Iraq "options" paper, including regime change. "We dismissed it at the time because it had no basis in law," Patey told the inquiry.

"We quite clearly distanced ourselves in Whitehall from talk about regime change," said Ricketts. Up to March 2002 "there was no increased appetite among UK ministers for military action in Iraq," he added.

Simon Webb, a former policy director at the Ministry of Defence, who also gave evidence today, described the issue of regime change in Iraq during the early days of the Bush administration as "the dog that did not bark. It grizzled, but it did not bark".

The exchanges on opening day of the inquiry are significant in the light of previously leaked documents which reveal that Blair told Bush in April 2002 – nearly a year before the invasion of Iraq – that he would in principle support military action "to bring about regime change".

A month earlier, David Manning, Downing Street foreign policy adviser at the time, told Blair that he had advised Rice: "You [Blair] would not budge in your support for regime change but you had to manage a press, a parliament, and a public opinion which is very different than anything in the States."

Yet in July 2002, Lord Goldsmith, then attorney general, was still warning the government that regime change was "not a legal basis for military action", according to leaked documents.

Pressed today by Sir Roderic Lyne, a member of the inquiry panel and a former UK ambassador to Moscow, to explain the JIC's assessment of the threat posed by Iraq at the time, Ricketts replied that it was a "major feature on the agenda but by no means dominant". The Balkans, Sierra Leone – where British forces were facing down rebels – and Afghanistan, were considered a higher priority, though attempts by Saddam to get his hands on weapons of mass destruction was "a continuing threat", he added. Patey said Iraq did not pose "an immediate threat".

The Iraq inquiry also heard that any lingering US sympathy for Britain's policy of "containment" of Saddam through UN sanctions quickly evaporated after 9/11. The Pentagon, rather than the US state department, became the "dominant instrument" in American foreign policy.

Moreover, voices in Washington were starting to link the Iraqi leader to al-Qaida. Ricketts said Britain had no evidence showing Iraq was "linked in any way to 9/11". He added: "We didn't have any such evidence."

Neocons in the Bush administration and the CIA claimed in the run-up to the invasion that Saddam was linked to al-Qaida, a claim dismissed at the time by MI6.

According to previously leaked documents, Ricketts, political director at the Foreign Office at the time, described the US in 2002 as "scrambling to establish a link between Iraq and al-Qaida", a link that was "so far frankly unconvincing". He told Jack Straw, then foreign secretary: "We have to be convincing that the threat is so serious/imminent that it is worth sending our troops to die for. Regime change does not stack up. It sounds like a grudge match between Bush and Saddam."

Lyne questioned why Britain and the US came to such different conclusions from other countries about the dangers Iraq posed. He asked: "With the exception of Kuwait, were the countries in the region banging on doors in London and Washington saying 'We're very worried about Saddam Hussein, please can you do something about him?'"

Patey replied: "I can't say my door was being knocked on very regularly."

One of the panel members, Lady Usha Prashar, later questioned whether official policy towards Iraq was about disarmament or regime change. "It seems a deliberate policy of ambiguity," she said. "I don't think that's true," replied Ricketts.

The inquiry also questioned officials about the legality and effect of no-fly zones imposed by the US and UK over northern and southern Iraq.

Gordon Brown's spokesman said the prime minister would "of course" appear before the inquiry if he was asked, but so far he had not been.