An "alternative intelligence" unit operating at the Pentagon in the run-up to the war on Iraq was dedicated to establishing a link between Saddam Hussein and al-Qaida, even though the CIA was unconvinced of such a connection, the US Senate was told yesterday.

A report presented to the armed services committee by the Pentagon's inspector general, Thomas Gimble, exposes the Bush administration to new charges of manipulating intelligence to make its case for going to war against Saddam nearly four years ago.

Mr Gimble described a unit called the Office for Special Plans, authorised by then Pentagon chief Donald Rumsfeld and overseen by the former policy chief Douglas Feith, to review raw intelligence on Iraq. The main focus of the unit was establishing a link between Saddam and al-Qaida - going against the consensus in the intelligence community that the Iraqi leader had nothing to do with the September 11 2001 terror attacks.

"The office of the under-secretary of defence for policy developed, produced and then disseminated alternative intelligence assessments on the Iraq and al-Qaida relationship, which included some conclusions that were inconsistent with the consensus of the intelligence community, to senior decision-makers," the report says.

Mr Feith's office was the source for some of the most glaring examples of faulty intelligence during the run-up to the war. In 2002 it promoted the idea that there had been a meeting between the lead September 11 hijacker, Mohammed Atta, and an Iraqi intelligence officer in Prague in April 2001. The intelligence community has never established this.

The unit deliberately undermined the work of intelligence agencies in briefings in August 2002 for the vice-president, Dick Cheney, and officials at the national security council, Mr Gimble said. The briefings repeated the claims about the Prague meeting but did not mention the CIA's extreme scepticism. Instead, the briefings alleged "fundamental problems with the way that the intelligence community was assessing the information".

Such actions were not illegal but they were "inappropriate", Mr Gimble said in his report. "A policy office was producing intelligence products and was not clearly conveying to senior decision-makers the variance with the consensus of the intelligence community."

Senator Carl Levin, who heads the committee, said the assessments produced by Mr Feith were of "dubious reliability" and created to bolster the case for war. "They arrived at an alternative interpretation of the Iraq/al-Qaida relationship that was much stronger than that assessed by the intelligence community and more in accord with the policy views of senior officials in the administration," Mr Levin told the committee. "I can't think of a more devastating commentary."

In 2002 Mr Feith was one of the most ardent proponents of a war on Iraq and a close associate of the other neo-conservatives of the administration: Mr Rumsfeld and his deputy, Paul Wolfowitz, and the vice-president, Dick Cheney. His work was authorised by Mr Rumsfeld and Mr Wolfowitz, and he coordinated with Mr Cheney's office.

Mr Feith, who left the Pentagon in 2005 for a post at Georgetown University, yesterday played down the influence of his unit. "This was not an alternative intelligence assessment," he told the Washington Post. "It was from the start a criticism of the consensus of the intelligence community, and in presenting it I was not endorsing its substance."