President Bush and Governor Bill Clinton each grappled with a different political threat yesterday, as the CIA admitted it had been covering up the Saddamgate affair and Mr Bush joined in the furore over Mr Clinton 's tourist trip to Moscow as a student in 1969.

The CIA's announcement that it was launching a formal investigation into its provision of 'incorrect and misleading information' to federal prosecutors in the Saddamgate inquiry is by far the more serious. The CIA is now, in effect, admitting it knew that United States food trade credits to Iraq were being spent on building up Saddam Hussein's military arsenal until the last weeks before the Gulf war.

But the strange case of Mr Clinton 's trip to Moscow looks to have a greater impact on this weekend's first presidential television debate, and on the election, now little more than three weeks away.

Mr Clinton should 'level with the American people on the draft, on whether he went to Moscow, how many demonstrations he led against his own country from foreign soil,' Mr Bush declared on the Larry King television show.

'I don't have the facts, but to go to Moscow one year after Russia crushed Czechoslovakia, and not remember who you saw - I think the answer is, level with the American people,' Mr Bush repeated.

For the first time the Clinton rebuttal team seems to have been wrong-footed by an attack by the Bush campaign team. 'It's a pathetic ploy by a desperate politician,' Mr Clinton 's spokesman said.

Mr Clinton said Mr Bush was grasping at straws. 'Here we are on the way to a debate about the great issues facing the country and he descends to that level,' he said.

Mr Clinton 's week-long visit to the Soviet capital, 23 years ago, had been part of a 40-day winter holiday touring Germany and Scandinavia while a Rhodes Scholar at Oxford. But Mr Clinton 's entire student experience, evading the Vietnam draft, taking part in anti-war demonstrations in Britain, and now the Moscow tour, are being conflated by the Republicans as something far more sinister.

The Republicans are scratching away at those doubts about Mr Clinton 's character which have nagged him since the draft avoidance and Gennifer Flowers scandals earlier this year.

By contrast, the Saddamgate affair could yet land some high-ranking US officials in court, facing serious charges. The decision by the CIA's director, Robert Gates, to unleash the agency's inspector-general onto the CIA's misleading of Congress and federal prosecutors has ominous implications. The inspector's report is not due until the end of the year. And the trial of the US manager of the Banco Nazionale de Lavoro (BNL) in what is already the biggest bank fraud in US history, involving the misappropriation of Dollars 4 billion, has also been put off.

But it is now clear from documents from the CIA's office in Rome that the spy agency knew loans being raised through BNL in Atlanta on the strength of US food trade credits were being diverted to Iraq's armament programme. The CIA, pleading an honest mistake, did not make this knowledge available to the department of justice, nor to the US Congress, nor to the judge in the fraud case in Atlanta.

'What happened was they had an illegal diversion of materials that would have helped them (the Iraqis) build a nuclear capability,' Mr Bush said on another television show last week. 'But to allege we were building up his arms, or building up his nuclear power knowingly, is fallacious.'

That presidential statement is undermined by the CIA's admission that it did know, and the Democrats now have powerful ammunition to unleash against Mr Bush.