The cash has been frozen since UN sanctions were imposed on Iraq following its 1990 invasion of Kuwait, which sparked the first Gulf War.

A ministry spokeswoman said US demands for the money to be confiscated were not legally enforceable.

But she said it could be made available to a new Iraqi government provided the UN sanctions were lifted.

The United States has been leading the way in hunting down Iraqi money. It announced last month that it was using special war powers to seize about 1.74 billion dollars (1.61 billion euros) in Iraqi funds frozen in US banks.

A US Treasury official said that besides the funds in the United States, 11 other countries had reported blocking some 600 million dollars of Iraqi funds under UN sanctions, two thirds of it by Britain.

SPACE.WIRE