Yesterday, however, it emerged that the terrorist factory was nothing of the kind - more a dilapidated collection of concrete outbuildings at the foot of a grassy sloping hill. Behind the barbed wire, and a courtyard strewn with broken rocket parts, are a few empty concrete houses. There is a bakery. There is no sign of chemical weapons anywhere - only the smell of paraffin and vegetable ghee used for cooking.

In the kitchen, I discovered some chopped up tomatoes but not much else. The cook had left his Kalashnikov propped neatly against the wall.

Ansar al Islam - the Islamic group that uses the compound identified by Powell as a military HQ to launch murderous attacks against secular Kurdish opponents - yesterday invited me and several other foreign journalists into their territory for the first time.

'We are just a group of Muslims trying to do our duty,' Mohammad Hasan, spokesman for Ansar al-Islam, explained. 'We don't have any drugs for our fighters. We don't even have any aspirin. How can we produce any chemicals or weapons of mass destruction?' he asked.

The radical terrorist group controls a tiny mountainous chunk of Kurdistan, the self-rule enclave of northern Iraq. Over the past year Ansar's fighters have been at war with the Kurdish secular parties who control the rest of the area. Every afternoon both sides mortar each other across a dazzling landscape of mountain and shimmering green pasture. Until last week this was an obscure and parochial conflict.

But last Wednesday Powell suggested that the 500-strong band of Ansar fighters had links with both al-Qaeda and Iraqi leader Saddam Hussein. They were, he hinted, a global menace - and more than that they were the elusive link between Osama bin Laden and Iraq.

This is clearly little more than cheap hyperbole. Yesterday Hassan took the unprecedented step of inviting journalists into what was previously forbidden territory in an almost certainly doomed attempt to prevent an American missile strike once the war with Iraq kicks off. Ali Bapir, a warlord in the neighbouring town of Khormal, lent us several fighters armed with machine guns and we set off.

We drove past an Ansar checkpoint, marked with a black flag and the Islamic militia's logo - the Koran, a sheaf of wheat and a sword. We kept going. The landscape was littered with the ruins of demolished houses, destroyed during Saddam's infamous Anfal campaign against the Kurds in 1988. At the corner of the valley we passed a pink mosque, with sandbagging on the roof. Washing hung from a courtyard. A group of Ansar fighters - in green military fatigues - smiled and waved us on.

Several of their comrades were in the graveyard across the road. There were numerous fresh plots, each marked with a black flag. After 20 minutes' drive along a twisting mountain track we arrived in Serget - the village identified from space by American satellite as a haven of terrorist activity.

Yesterday, however, Hassan was at pains to deny any link with al-Qaeda. 'All we are trying to do is fulfil the prophet's goals,' he said. 'Read the Koran and you'll understand.'

Senior officials from the Patriotic Union of Kurdistan - the party with which Ansar is at war - insist that the Islamic guerrillas based in the village have been experimenting with poisons. They have smeared a crude form of cyanide on door handles. They had even tried it out on several farm animals, including sheep and donkeys, they claim. The guerrillas have also managed to construct a 1.5kg 'chemical' bomb designed to explode and kill anyone within a 50-metre radius, Kurdish intelligence sources say.

Hassan yesterday dismissed all these allegations as 'lies'. 'We don't have any chemical weapons. As you can see this is an isolated place,' Ayub Khadir, another fighter, with a bushy pirate beard and blue turban, said. And yet, despite the fact there appeared to be no evidence of chemical experimentation, Ansar's complex was lavish for an organisation that purports to be made up merely of simple Muslims. Concealed in a concrete bunker, we discovered a sophisticated television studio, complete with cameras, editing equipment and a scanner.

In a neighbouring room were several computers, beneath shelves full of videotapes. A banner written in Arabic proclaims: 'Those who believe in Islam will be rewarded.'

Until recently Ansar had its own website where the faithful could log on to footage of Ansar guerrillas in battle. In small concrete bunkers the fighters operated their own radio station, Radio Jihad. The announcer had clearly been sitting on an empty box of explosives. Hassan denied yesterday that his revolutionary group received any funding from Baghdad or from Iran, a short hike away over the mountains.

'If Colin Powell were to come here he would see that we have nothing to hide,' he said. But Ansar's sources of funding remain mysterious - and their real purpose tantalisingly unclear. 'All Ansar fighters are from Iraq,' Hassan said. 'Iraq is one of the richest countries in the world. Our fighters have brought their own things with them.'

But while they appear to pose no real threat to Washington or London, Ansar's fighters are a brutal bunch. They have so far killed more than 800 opposition Kurdish fighters. They have shot dead several civilians. They have even tried - last April - to assassinate the Prime Minister of the neighbouring town of Sulamaniyah, the mild-mannered Dr Barham Salih. The plot went wrong and two of the assassins were shot dead. A third is in prison. 'We are fed up with them. We wish they would go away,' one villager, who refused to be named, said.

The militia's weapons had been inherited, captured from their enemies or bought from smugglers, Hassan said. Kurdish intelligence sources insist that there is 'solid and tangible proof' linking Ansar both to Iraqi intelligence agents and to al-Qaeda. They say that a group of fighters visited Afghanistan twice before the fall of the Taliban and met Abu Hafs, one of bin Laden's key lieutenants.