Australia boosts spy spending after Iraq report

Australia will double the budget and staffing of one of its main intelligence agencies after a critical independent report on pre-Iraq war and Bali bombing intelligence, Prime Minister John Howard said.

The report by former intelligence chief Philip Flood said Australian intelligence relied on thin and ambiguous information to assess Iraq's weapons of mass destruction and failed to gauge the threat from Jemaah Islamiah before the Bali bombings.

Howard, a staunch ally of the United States and who faces a cliff-hanger election later this year, said he would accept all the major recommendations included in the inquiry.

This included increasing annual funding for the Office of National Assessments (ONA) to A$25 million ($18 million) from A$13.1 million and boosting ONA staff numbers to 145 from the current 74.

Australia's equivalent of the US National Security Agency, the ONA advises the prime minister based on intelligence collected by other agencies and the Department of Foreign Affairs and Trade (DFAT).

The ONA would take over some unspecified responsibilities from the foreign department under the funding and staff boost, Mr Howard said in a statement released with Mr Flood's report.

"In order to strengthen the contribution of sound intelligence to government decision making, Mr Flood proposes an extensive list of recommendations concerning the better functioning of the intelligence agencies, improved oversight arrangements and greater transparency and accountability," Mr Howard said.