A United States charity chief suspected of al-Qaeda links has admitted to sending donations to Muslim fighters in Chechnya and Bosnia.

Enaam Arnaout made the plea as part of a bargain with prosecutors.

In return for helping the authorities with their investigations state prosecutors have dropped all remaining charges against him.

"This plea agreement shows that this defendant and this charity had nothing to do with al-Qaeda or Osama Bin Laden," said Mr Arnaout's lawyer Joseph Duffy, Reuters reports.

Ashcroft accused Arnaout of al-Qaeda links

A Syrian-born US citizen, Mr Arnaout was arrested in April last year.

The FBI affidavit said he had close connections with Osama Bin Laden "and many of his key associates dating back more than a decade".

They accused him of sending money to al-Qaeda militants and to Sudan.

He was also said to have hosted one of Bin Laden's wives at his flat in Pakistan.

According to his lawyer, doubts that the jury would be impartial in a case involving terrorism and an Arab American led Mr Arnaout to make the plea.

US Attorney General John Ashcroft travelled to Chicago last year to announce the charges against him, including the al-Qaeda connection.

Life sentence

Mr Arnaout faced a 90-year prison sentence without the chance of parole.

The Benevolence International Foundation's offices in Chicago were raided and its assets were frozen.

Large companies in the US were discovered to have made donations to the charity through matching their employees' contributions.

Prosecutors said the organisation had exploited Islam's emphasis on giving charity, known as zakat, as donors did not know where their money was going.

The charity describes itself in its brochures as a humanitarian organisation dedicated to helping victims of wars and natural disasters in Afghanistan and elsewhere.

Tax documents suggest it received $3.3m in contributions for the year ending April 2000.