A key strategist for Conservative Leader Stephen Harper has been dropped after he was exposed as the source for a Sun Media story alleging Liberal Leader Michael Ignatieff played a role in the Iraq war.

The Conservative Party war room confirmed Wednesday that Patrick Muttart "has no further role with our campaign."

Muttart is Harper's former deputy chief of staff. He was a chief strategist in the 2006 campaign that brought Harper to power, and again in the 2008 election that saw him re-elected. He currently works for Mercury LLC, a public affairs and political strategy firm that is based in Chicago and Washington.

Sources tell CBC News that Muttart was surprised to learn that he was getting dumped from the campaign. He was working as a paid consultant, not a volunteer.

The Conservative campaign distanced itself from Muttart after Pierre Karl Peladeau, the president and CEO of Sun Media Corporation, published an editorial Wednesday that accused the Conservatives of deliberately trying to plant information that would damage Ignatieff's campaign.

The editorial explained the background to a story from last week run by the media chain. It said that Kory Teneycke, vice-president of Sun News, was contacted by Muttart, who said he had a report prepared by a "U.S. source" outlining the activities and whereabouts of Ignatieff during the time leading up to the U.S.-led war in Iraq in 2003.

Muttart supplied a photo that included a man "very closely resembling" Ignatieff, according to Peladeau, dressed in military fatigues and holding a rifle that was apparently taken in 2002.

Peladeau said Teneycke, who is Harper's former director of communications, and the news team were "excited" to receive information that "contradicted Ignatieff's story about his role in the region," but that they did due diligence to verify that it was Ignatieff in the photo.

It turned out that the man in the photo was not Ignatieff, Peladeau wrote.

Photo couldn't be verified

The Conservative war room confirmed the photo and other information it had "acquired during Internet research" was supplied to Sun Media.

"The campaign made clear to Sun Media that the identity in the photograph could not be verified and that our own efforts to verify the photograph had been exhausted," a statement provided to CBC News said.

The Sun chain published a story on April 20 with the headline, "Ignatieff linked to Iraq war planning." It reported that in his political career Ignatieff has always said he was on the sidelines of the Iraq war, but "new information reveals he was on the front lines of pre-invasion planning" when he worked at Harvard University's Carr Center for Human Rights.

It cited quotes from an American military official who described the work the military had done with the human rights organization and he named Ignatieff as one of the group's employees. The article said Ignatieff's work with the organization and his writings helped push the U.S. government's message that the war was necessary.

The day the article appeared, a reporter from the chain suggested to Ignatieff that he had been dishonest and that he was "deeply involved in helping the Bush administration plan the invasion of Iraq." The reporter asked the Liberal leader at a campaign event why he hadn't been "up-front" about his "deep involvement in that planning."

Ignatieff flatly rejected the premise of the question, and said the work he did with the Carr Center was open, transparent and focused on reducing civilian deaths during armed conflicts. The organization worked with the militaries of many countries, including Canada, he noted.

"The purpose of the Carr Centre — remember it's a human rights centre — was to find ways to make sure that when you do humanitarian operations to protect civilians, you don't end up killing civilians," Ignatieff said.

"At no time, in no way, was I ever involved in the planning of any offensive combat operations by any military forces," Ignatieff said.

Muttart's firm hits back

The newspaper chain did not run the photo that was supplied to it by the Conservative campaign when it ran the article.

"The Sun made the right decision," the Conservative campaign statement said. But Peladeau blasted the Conservatives over the "troubling episode."

"It is my belief that this planted information was intended to first and foremost seriously damage Michael Ignatieff's campaign, but in the process to damage the integrity and credibility of Sun Media and, more pointedly, that of our new television operation, Sun News," Peladeau wrote.

"Bad information is an occupational hazard in this business, and fortunately our in-house protocols prevented the unthinkable," he wrote. He said the "ultimate source" of the material that was provided to the news organization is "profoundly troubling" to him and "should be of concern to all Canadians."

In a release late Wednesday, Mercury, the firm where Muttart works, hit back at Peladeau's claims, saying at no time did Muttart "mislead, or intend to mislead Sun Media, in his provision of information to them."

The firm said Peladeau's assertion that Muttart aimed to "damage the integrity and credibility" of Sun Media and Sun TV News was "false and downright bizarre."

The Mercury press release said it had been hired by Quebecor to help Sun TV News with its pre-license branding and positioning, and that Muttart himself was the "original source" for the network's "hard news" and "straight talk" branding language. The firm noted it continues to provide pro-bono work for the network, giving feedback on graphics and on-air promotional spots.