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Chalabi, a 71-year-old lawmaker who headed the finance committee, "died this morning... of a heart attack," parliament said in a statement offering condolences for his death.

The interior ministry issued a statement paying tribute to Chalabi's work for the "salvation of the Iraqi people from dictatorship."

Living in exile as head of the Iraqi National Congress [INC], which opposed Saddam Hussein, Chalabi became a White House favourite for information he provided which supported the US justification for invading Iraq in 2003.

But he lost favour after the invasion when much of his information regarding Saddam Hussein's alleged possession of weapons of mass destruction and links to al-Qaeda turned out to be false.

"He said he would end Iraq’s boycott of trade with Israel, and would allow Israeli companies to do business there. He said [the new Iraqi government] would agree to rebuild the pipeline from Mosul to Haifa," said Marc Zell, former undersecratory for defence, adding Chalabi failed to deliver on his promises.  

He was also accused of providing information to Iran.

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Dogged by allegations of corruption

Iraqi police and US forces raided his home in May 2004 and seized documents and computers.

The only formal charge brought against him was putting forged banknotes into circulation after the raid turned up a small number in his home.

Chalabi was also dogged by allegations of corruption. He was convicted by a Jordanian court of embezzling funds from the collapsed Petra bank in 1992, a case he claims was politically motivated.

Born in October 1944 to a wealthy Baghdad family, Chalabi left the country in 1956 and spent most of his life in Britain and the US, where he received a doctorate in mathematics.

He organised a Kurdish uprising in northern Iraq in the mid-1990s in which hundreds of people were killed. He later fled, returning only when US-led invading forces took control.

Undaunted, he provided a steady stream of briefings which were used to bolster the case for the 2003 war and his INC party provided a volunteer force which fought under US command during the invasion.

Key figures in US president George W. Bush's administration hoped Chalabi and the INC might take over Iraq as an interim government after the fall of Saddam.

But because of its long years outside Iraq, his group was little-known and little-liked at home. Plans for a smooth and easy political transition fell apart, and instead Iraq was plagued by years of bloodshed.

Chalabi held the rotating presidency of the US-appointed Iraqi Governing Council after the invasion, served as deputy prime minister and also temporarily held the key oil portfolio, but he never reached the political heights to which he had originally aspired.

Following the invasion, Chalabi, a secular Shia, was one of the main proponents of the "de-Baathification" drive to remove alleged Saddam supporters from public life, which alienated Iraq's Sunni Arab minority and fuelled the revolt against US-led occupation forces.

Subsequent government policies further disenchanted Sunnis, and anger within the community ultimately laid the groundwork for the Islamic State group's seizure of large parts of the country last year.

Leading politicians offer condolences

The first deputy speaker of parliament, Sheik Humam Hamoudi, lamented Chalabi's death as a "big loss" to Iraq, calling him "an example of perseverance and dedication."

"Our national and political arena has lost a prominent figure who dedicated his life to serve the country," he added in a statement.

Shia lawmaker Muwaffak al-Rubaie, Iraq's former national security adviser, described Chalabi as a "great politician" who "played by the rules."

"It is a very bad day for Iraq," al-Rubaie said in a phone interview. "He was one of the most seasoned and pioneering politicians. Chalabi worked for a democratic, liberal Iraq," he added. "I am glad he died peacefully."