US: The White House has admitted that President Bush was unaware of a plan to allow an Arab company to take over operations at six of America's biggest ports before the deal was approved by his administration.
Republicans and Democrats in Congress have called for the deal to be blocked on security grounds, arguing that it could leave the US more vulnerable to terrorist attack.
Mr Bush has threatened to veto any congressional action against the takeover of port operations, insisting that the US would continue to own the ports and US authorities would retain responsibility for security.
Dubai Ports World, a company controlled by the government of the United Arab Emirates, hopes to close a $6.8 billion (€5.7 billion)deal by March 2nd to take over P&O's operations at 29 ports around the world.
A source close to the deal in Dubai told The Irish Times that there was a strategic logic behind the acquisition of the ports, which was reflected by the size of the investment.
The source said that US politicians' opposition to the takeover was ill-founded, but suggested that the future of the US ports could be temporarily "ring-fenced", allowing the rest of the deal to go ahead while Congress receives reassurances about security.
The port takeover has already been approved by the Committee on Foreign Investment in the United States, made up of officials from the Defence, State, Commerce and Transportation Departments, along with the National Security Council and other agencies.
Dubai Ports World volunteered last year to allow goods being shipped to the US to be screened before they left a port it operates in Dubai.
The company has agreed to continue this effort at its terminals and take other security steps, including giving American officials access to information on its US-based employees and certifying that it had conducted background checks on them.
"The counter-terrorism experts looked at it. The intelligence community did assessments to make sure that there was no national security threat," White House spokesman Scott McClellan said yesterday.
Mr Bush has suggested that the objections to the deal might be based on prejudice against a company from the Middle East, one he described as an ally in fighting terrorism.
"This is a company that has played by the rules, that has been co-operative with the United States, a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through," he said.
Critics of the deal, who include Republican leaders in the House and Senate as well as Democrats, argue that the anti-terrorism record of the United Arab Emirates is questionable. They point out that two of the hijackers in the 9/11 attacks came from the United Arab Emirates and laundered some of their money through its banking system.
It was also the main trans-shipment point for Pakistani nuclear engineer AQ Khan, who ran the world's largest nuclear proliferation ring from warehouses near Dubai, met Iranian officials there, and shipped equipment which can be used to enrich uranium, from there to Libya.
New York Republican congressman Peter King said he will introduce emergency legislation to block the port takeover, adding that he believes there are enough votes in Congress to override a presidential veto.
Mr Bush has not vetoed any legislation from the Republican-dominated Congress since he took office five years ago.
Mr McClellan dismissed any connection between the deal and former Dubai Ports World executive David Sanborn, whom the White House appointed last month to be the new administrator of the Maritime Administration of the Transportation Department.
"My understanding is that he has assured us that he was not involved in the negotiations to purchase this British company," Mr McClellan said.
He said that blocking the deal would have no impact on port security, which is the responsibility of the US Coast Guard and Border Patrol.
