Group leader Mullah Krekar denies any terrorist links

The UK government has frozen all funds belonging to radical Islamic group Ansar al-Islam, suspected of having links to Baghdad, al- Qaeda and chemical weapons.

The Bank of England said the government had ordered financial institutions to check for accounts held in the group's name and to freeze them.

Its statement said: "This is because the Treasury have reasonable grounds for suspecting that Ansar al-Islam is or may be a (group) who commits, attempts to commit, facilitates or participates in the commission of acts of terrorism."

Earlier this month, US Secretary of State Colin Powell told the UN Security Council Ansar al-Islam gave safe haven to members of Osama bin Laden's al Qaeda network, including a senior Baghdad agent, and may have tried to make chemical weapons.

"This is further evidence of our continued determination to work closely with the US. and other countries to cut off funds to terrorist organisations," a Treasury spokesman said.

Holy war

Ansar al-Islam is said to go by a number of other names such as the Devotees of Islam, is based in Kurdish north-eastern Iraq, a rugged corner of the country out of Baghdad's control.

It preaches a radical interpretation of Islam and holy war and controls about a dozen villages and a range of peaks between Kurdish-held territory and the Iranian border.

The group's leader Mullah Krekar, who has lived as a refugee in Norway since 1991, refutes he has links to terrorism or chemical weapons and says he is an enemy of Saddam Hussein.

However, on Wednesday Norway announced it was going to send him back to northern Iraq.