Canberra Knew of Bali Bomb Threat

Australia's spy agency has admitted that the mastermind behind the Bali bombing last October was known to its analysts before the fatal attacks took place.

Bill O'Malley, a south-east Asia analyst with the office of national assessments, told a Senate inquiry that the threat of an attack by the group Jemaah Islamiah had been raised in a report just two days before the Bali bombing.

He also said that Imam Samudra, now on trial in Bali for planning the October 12 bombing, was then known to the ONA. Mr O'Malley said analysts "strongly believed" that some of those implicated in the bombings had been in Indonesia at the time.

One was Imam Samudra, who is accused of raising funds and recruiting bombers for the Bali attack, which killed 202 people.

Mr O'Malley said an ONA report for ministers, produced on October 10, had listed alleged Jemaah Islamiah operations, such as a foiled multiple terrorist attack on embassies and public buildings in Singapore, and claimed more were "on the cards".

The report continued: "Key Jemaah Islamiah leaders, who have even bigger plans are still free."

The Australian government was first accused of downplaying the threat of a terrorist attack in Bali just days after the bombings. Government travel warnings at the time mentioned a heightened risk throughout Indonesia but made no specific reference to Bali, which, until October, had been one of the most popular overseas destinations for Australian tourists.

Criticism of the government intensified this week as further evidence emerged during the Senate committee inquiry.

Australian newspaper reports this week claimed that an ONA minute passed to the foreign minister, Alexander Downer, on September 27 2001, identified Bali as an "important symbolic target", although Mr Downer said he did not recall seeing the report. The ONA's chief, Kim Jones, yesterday confirmed that his analysts had named Bali as a potential target in September 2001.

Mr Downer was also told about the threat to Bali during a meeting with the ONA last June. Senior officials said hotels, clubs and airports could be under threat and that Bali, Singapore, and the Indonesian industrial city of Riau, were all possible targets.

One possible cause of the intelligence failure could be a conflict among Australia's five main spy agencies.

Dennis Richardson, the head of Australia's domestic intelligence service, Asio, told ABC radio that the defence intelligence organisation had consistently downgraded the terrorism threat in Indonesia. "Asio assessed as high the threat to Australian interests in Indonesia from 28 September 2001," he said. "For its purposes, the defence intelligence organisation assessed the threat to western interests in Indonesia at low to medium in August 2002. We now know that Asio was closer."

The opposition Labour party has attacked the government's failure to upgrade travel warnings in the light of intelligence information about possible attacks, and has also criticised the failure of spy services to pick up on the threat from Jemaah Islamiah.

Simon Crean, the Labour leader, said yesterday: "If the intelligence agency had more information about [the organisation], who knows what could have been prevented?"

But Mr Downer said: "Never has the government received any intelligence that there was to be a terrorist attack in Bali."