Former US secretary of state asks why CIA failed to warn him over Iraqi defector who has admitted fabricating WMD evidence

Colin Powell, the US secretary of state at the time of the Iraq invasion, has called on the CIA and Pentagon to explain why they failed to alert him to the unreliability of a key source behind claims of Saddam Hussein's bio-weapons capability.

Responding to the Guardian's revelation that the source, Rafid Ahmed Alwan al-Janabi or "Curveball" as his US and German handlers called him, admitted fabricating evidence of Iraq's secret biological weapons programme, Powell said that questions should be put to the US agencies involved in compiling the case for war.

In particular he singled out the CIA and the Defence Intelligence Agency – the Pentagon's military intelligence arm. Janabi, an Iraqi defector, was used as the primary source by the Bush administration to justify invading Iraq in March 2003. Doubts about his credibility circulated before the war and have been confirmed by his admission this week that he lied.

Powell said that the CIA and DIA should face questions about why they failed to sound the alarm about Janabi. He demanded to know why it had not been made clear to him that Curveball was totally unreliable before false information was put into the key intelligence assessment, or NIE, put before Congress, into the president's state of the union address two months before the war and into his own speech to the UN.

"It has been known for several years that the source called Curveball was totally unreliable," he told the Guardian . "The question should be put to the CIA and the DIA as to why this wasn't known before the false information was put into the NIE sent to Congress, the president's state of the union address and my 5 February presentation to the UN."

On 5 February 2003, a month before the invasion, Powell went before the UN security council to make the case for war. In his speech he referred to "firsthand descriptions of biological weapons factories on wheels and on rails … The source was an eyewitness who supervised one of these facilities". It is now known that the source, Janabi, made up the story.

Curveball told the Guardian he welcomed Powell's demand. "It's great," he said tonight. "The BND [German intelligence] knew in 2000 that I was lying after they talked to my former boss, Dr Bassil Latif, who told them there were no mobile bioweapons factories. For 18 months after that they left me alone because they knew I was telling lies even though I never admitted it. Believe me, back then, I thought the whole thing was over for me.

"Then all of a sudden [in the run up to the 2003 invasion] they came back to me and started asking for more details about what I had told them. I still don't know why the BND then passed on my information to the CIA and it ended up in Powell's speech.

"I want there to be an inquiry so that people will know the truth. So many lies have been told about me over the years. I finally want the truth to come out."

Powell has previously expressed regret about the role he unwittingly played in passing on false information to the UN, saying it had put a blot on his career. But his latest comments increase pressure on the intelligence agencies and their former chiefs to divulge what they knew at the time and why they failed to filter out such a bad source.

George Tenet, then head of the CIA, is particularly in the firing line. He failed to pass on warnings from German intelligence about Curveball's reliability.

Tenet put out a statement on his website in response to Curveball's admission. He said: "The handling of this matter is certainly a textbook case of how not to deal with defector provided material. But the latest reporting of the subject repeats and amplifies a great deal of misinformation."

Tenet refers to his own 2007 memoir on the war, At the Centre of the Storm, in which he insists that the first he heard about Curveball's unreliability was two years after the invasion – "too late to do a damn thing about it".

In the light of Curveball's confession, politicians in Iraq called for his permanent exile and scorned his claim to want to return to his motherland and build a political party. "He is a liar, he will not serve his country," said one Iraqi MP. In his adopted home of Germany, MPs are demanding to know why the BND, paid Curveball £2,500 a month for at least five years after they knew he had lied.

Hans-Christian Ströbele, a Green MP, said Janabi had arguably violated a German law which makes warmongering illegal. Under the law, it is a criminal offence to do anything "with the intent to disturb the peaceful relations between nations, especially anything that leads to an aggressive war", he said. The maximum penalty is life imprisonment, he added, though he did not expect it would ever come to that.

Curveball told the Guardian he was pleased to have finally told the truth. He said he had given the Guardian's phone number to his wife and brother in Sweden "just in case something happens to me".

Further pressure on the CIA came from Lawrence Wilkerson, Powell's chief of staff at the time of the invasion. He said Curveball's lies raised questions about how the CIA had briefed Powell ahead of his fateful UN speech.

Tyler Drumheller, head of the CIA's Europe division in the run-up to the invasion, said he welcomed Curveball's confession because he had always warned Tenet that he may have been a fabricator.

Tenet has disputed Drumheller's version of events, insisting that the official made no formal warning to CIA headquarters.