Wherever you go in Iraq's southern city of Basra, there is dust. It gets in your eyes and nose and throat. It swirls in school playgrounds and consumes children kicking a plastic ball. "It carries death," said Dr Jawad Al-Ali, a cancer specialist and member of Britain's Royal College of Physicians. "Our own studies indicate that more than 40 per cent of the population in this area will get cancer: in five years' time to begin with, then long afterwards. Most of my own family now have cancer, and we have no history of the disease. It has spread to the medical staff of this hospital. We don't know the precise source of the contamination, because we are not allowed to get the equipment to conduct a proper scientific survey, or even to test the excess level of radiation in our bodies. We suspect depleted uranium, which was used by the Americans and British in the Gulf War right across the southern battlefields."

Under economic sanctions imposed by the United Nations Security Council almost 10 years ago, Iraq is denied equipment and expertise to clean up its contaminated battle-fields, as Kuwait was cleaned up. At the same time, the Sanctions Committee in New York, dominated by the Americans and British, has blocked or delayed a range of vital equipment, chemotherapy drugs and even pain-killers. "For us doctors," said Dr Al-Ali, "it is like torture. We see children die from the kind of cancers from which, given the right treatment, there is a good recovery rate." Three children died while I was there.

Six other children died not far away on January 25, last year. An American missile hit Al Jumohria, a street in a poor residential area. Sixty-three people were injured, a number of them badly burned. "Collateral damage," said the Department of Defence in Washington. Britain and the United States are still bombing Iraq almost every day: it is the longest Anglo-American bombing campaign since the second world war, yet, with honourable exceptions, very little appears about it in the British media. Conducted under the cover of "no fly zones", which have no basis in international law, the aircraft, according to Tony Blair, are "performing vital humanitarian tasks". The ministry of defence in London has a line about "taking robust action to protect pilots" from Iraqi attacks - yet an internal UN Security Sector report says that, in one five-month period, 41 per cent of the victims were civilians in civilian targets: villages, fishing jetties, farmland and vast, treeless valleys where sheep graze. A shepherd, his father, his four children and his sheep were killed by a British or American aircraft, which made two passes at them. I stood in the cemetery where the children are buried and their mother shouted, "I want to speak to the pilot who did this."

This is a war against the children of Iraq on two fronts: bombing, which in the last year cost the British taxpayer £60 million. And the most ruthless embargo in modern history. According to Unicef, the United Nations Children's Fund, the death rate of children under five is more than 4,000 a month - that is 4,000 more than would have died before sanctions. That is half a million children dead in eight years. If this statistic is difficult to grasp, consider, on the day you read this, up to 200 Iraqi children may die needlessly. "Even if not all the suffering in Iraq can be imputed to external factors," says Unicef, "the Iraqi people would not be undergoing such deprivation in the absence of the prolonged measures imposed by the Security Council and the effects of war."

Through the glass doors of the Unicef offices in Baghdad, you can read the following mission statement: "Above all, survival, hope, development, respect, dignity, equality and justice for women and children." A black sense of irony will be useful if you are a young Iraqi. As it is, the children hawking in the street outside, with their pencil limbs and eyes too big for their long thin faces, cannot read English, and perhaps cannot read at all.

"The change in 10 years is unparalleled, in my experience," Anupama Rao Singh, Unicef's senior representative in Iraq, told me. "In 1989, the literacy rate was 95%; and 93% of the population had free access to modern health facilities. Parents were fined for failing to send their children to school. The phenomenon of street children or children begging was unheard of. Iraq had reached a stage where the basic indicators we use to measure the overall well-being of human beings, including children, were some of the best in the world. Now it is among the bottom 20%. In 10 years, child mortality has gone from one of the lowest in the world, to the highest."

Anupama Rao Singh, originally a teacher in India, has spent most of her working life with Unicef. Helping children is her vocation, but now, in charge of a humanitarian programme that can never succeed, she says, "I am grieving." She took me to a typical primary school in Saddam City, where Baghdad's poorest live. We approached along a flooded street: the city's drainage and water distribution system have collapsed. The head, Ali Hassoon, wore the melancholia that marks Iraqi teachers and doctors and other carers: those who know they can do little "until you, in the outside world, decide". Guiding us around the puddles of raw sewage in the playground, he pointed to the high water mark on a wall. "In the winter it comes up to here. That's when we evacuate. We stay as long as possible, but without desks, the children have to sit on bricks. I am worried about the buildings coming down."

The school is on the edge of a vast industrial cemetery. The pumps in the sewage treatment plants and the reservoirs of water are silent, save for a few wheezing at a fraction of their capacity. Many were targets in the American-led blitz in January 1991; most have since disintegrated without spare parts from their British, French and German builders. These are mostly delayed by the Security Council's Sanctions Committee; the term used is "placed on hold". Ten years ago, 92% of the population had safe water, according to Unicef. Today, drawn untreated from the Tigris, it is lethal. Touching two brothers on the head, the head said, "These children are recovering from dysentery, but it will attack them again, and again, until they are too weak." Chlorine, that universal guardian of safe water, has been blocked by the Sanctions Committee. In 1990, an Iraqi infant with dysentery stood a one in 600 chance of dying. This is now one in 50.

Just before Christmas, the department of trade and industry in London blocked a shipment of vaccines meant to protect Iraqi children against diphtheria and yellow fever. Dr Kim Howells told parliament why. His title of under secretary of state for competition and consumer affairs, eminently suited his Orwellian reply. The children's vaccines were banned, he said, "because they are capable of being used in weapons of mass destruction". That his finger was on the trigger of a proven weapon of mass destruction - sanctions - seemed not to occur to him. A courtly, eloquent Irishman, Denis Halliday resigned as co-ordinator of humanitarian relief to Iraq in 1998, after 34 years with the UN; he was then Assistant Secretary-General of the United Nations, one of the elite of senior officials. He had made his career in development, "attempting to help people, not harm them". His was the first public expression of an unprecedented rebellion within the UN bureaucracy. "I am resigning," he wrote, "because the policy of economic sanctions is totally bankrupt. We are in the process of destroying an entire society. It is as simple and terrifying as that . . . Five thousand children are dying every month . . . I don't want to administer a programme that results in figures like these."

When I first met Halliday, I was struck by the care with which he chose uncompromising words. "I had been instructed," he said, "to implement a policy that satisfies the definition of genocide: a deliberate policy that has effectively killed well over a million individuals, children and adults. We all know that the regime, Saddam Hussein, is not paying the price for economic sanctions; on the contrary, he has been strengthened by them. It is the little people who are losing their children or their parents for lack of untreated water. What is clear is that the Security Council is now out of control, for its actions here undermine its own Charter, and the Declaration of Human Rights and the Geneva Convention. History will slaughter those responsible."

Inside the UN, Halliday broke a long collective silence. Then on February 13 this year, Hans von Sponeck, who had succeeded him as humanitarian co-ordinator in Iraq, resigned. "How long," he asked, "should the civilian population of Iraq be exposed to such punishment for something they have never done?" Two days later, Jutta Burghardt, head of the World Food Programme in Iraq, resigned, saying privately she, too, could not tolerate what was being done to the Iraqi people. Another resignation is expected.

When I met von Sponeck in Baghdad last October, the anger building behind his measured, self-effacing exterior was evident. Like Halliday before him, his job was to administer the Oil for Food Programme, which since 1996 has allowed Iraq to sell a fraction of its oil for money that goes straight to the Security Council. Almost a third pays the UN's "expenses", reparations to Kuwait and compensation claims. Iraq then tenders on the international market for food and medical supplies and other humanitarian supplies. Every contract must be approved by the Sanctions Committee in New York. "What it comes down to," he said, "is that we can spend only $180 per person over six months. It is a pitiful picture. Whatever the arguments about Iraq, they should not be conducted on the backs of the civilian population."

Denis Halliday and I travelled to Iraq together. It was his first trip back. Washington and London make much of the influence of Iraqi propaganda when their own, unchallenged, is by far the most potent. With this in mind, I wanted an independent assessment from some of the 550 UN people, who are Iraq's lifeline. Among them, Halliday and von Sponeck are heroes. I have reported the UN at work in many countries; I have never known such dissent and anger, directed at the manipulation of the Security Council, and the corruption of what some of them still refer to as the UN "ideal".

Our journey from Amman in Jordan took 16 anxious hours on the road. This is the only authorised way in and out of Iraq: a ribbon of wrecked cars and burnt-out oil tankers. Baghdad was just visible beneath a white pall of pollution, largely the consequence of the US Air Force strategy of targeting the industrial infrastructure in January 1991. Young arms reached up to the window of our van: a boy offering an over-ripe banana, a girl a single stem flower. Before 1990, such a scene was rare and frowned upon.

Baghdad is an urban version of Rachel Carson's Silent Spring. The birds have gone as avenues of palms have died, and this was the land of dates. The splashes of colour, on fruit stalls, are surreal. A bunch of Dole bananas and a bag of apples from Beirut cost a teacher's salary for a month; only foreigners and the rich eat fruit. A currency that once was worth two dollars to the dinar is now worthless. The rich, the black marketeers, the regime's cronies and favourites, are not visible, except for an occasional tinted-glass late-model Mercedes navigating its way through the rustbuckets. Having been ordered to keep their heads down, they keep to their network of clubs and restaurants and well-stocked clinics, which make nonsense of the propaganda that the sanctions are hurting them, not ordinary Iraqis.

In the centre of Baghdad is a monument to the 1980-88 Iran-Iraq war, which Saddam Hussein started, with encouragement from the Americans, who wanted him to destroy their great foe, the Ayatollah Khomeini. When it was over, at least a million lives had been lost in the cause of nothing, fuelled by the arms industries of Britain and the rest of Europe, the Soviet Union and the United States: the principal members of the Security Council. The monument's two huge forearms, modelled on Saddam's arms (and cast in Basingstoke), hold triumphant crossed sabres. Cars are allowed to drive over the helmets of dead Iranian soldiers embedded in the concourse. I cannot think of a sight anywhere in the world that better expresses the crime of sacrificial war.

We stayed at the Hotel Palestine, once claiming five stars. The smell of petrol was constant. As disinfectant is often "on hold", petrol, more plentiful than water, has replaced it. There is an Iraqi Airways office, which is open every day, with an employee sitting behind a desk, smiling and saying good morning to passing guests. She has no clients, because there is no Iraqi Airways - it died with sanctions. The pilots drive taxis and sweep the forecourt and sell used clothes. In my room, the water ran gravy brown. The one frayed towel was borne by the maid like an heirloom. When I asked for coffee to be brought up, the waiter hovered outside until I was finished; cups are at a premium. His young face was streaked with sadness. "I am always sad," he agreed matter-of-factly. In a month, he will have earned enough to buy tablets for his brother's epilepsy.

The same sadness is on the faces of people in the evening auctions, where intimate possessions are sold for food and medicines. Television sets are the most common items; a woman with two toddlers watched their pushchairs go for pennies. A man who had collected doves since he was 15 came with his last bird; the cage would go next. Although we had come to pry, my film crew and I were made welcome. Only once, was I the brunt of the hurt that is almost tangible in a society more westernised than any other Arab country. "Why are you killing the children?" shouted a man from behind his bookstall. "Why are you bombing us? What have we done to you?" Passers-by moved quickly to calm him; one man placed an affectionate arm on his shoulder, another, a teacher, materialised at my side. "We do not connect the people of Britain with the actions of the government," he said. Laith Kubba, a leading member of the exiled Iraqi opposition, later told me in Washington, "The Iraqi people and Saddam Hussein are not the same, which is why those of us who have dedicated our lives to fighting him, regard the sanctions as immoral."

In an Edwardian colonnade of Doric and Corinthian columns, people come to sell their books, not as in a flea market, but out of desperate need. Art books, leather bound in Baghdad in the 30s, obstetrics and radiology texts, copies of British Medical Journals, first and second editions of Waiting For Godot, The Sun Also Rises and, no less, British Housing Policy 1958 were on sale for the price of a few cigarettes. A man in a clipped grey moustache, an Iraqi Bertie Wooster, said, "I need to go south to see my sister, who is ill. Please be kind and give me 25 dinars." (About a penny). He took it, nodded and walked smartly away.

Mohamed Ghani's studio is dominated by a huge crucifix he is sculpting for the Church of Assumption in Baghdad. As Iraq's most famous sculptor, he is proud that the Vatican has commissioned him, a Muslim, to sculpt the Stations of the Cross in Rome - a romantic metaphor of his country as Mesopotamia, the "cradle of Western civilisation". His latest work is a 20-foot figure of a woman, her child gripping her legs, pleading for food. "Every morning, I see her," he said, "waiting, with others just like her, in a long line at the hospital at the end of my road. They are what we have been forced to become." He has produced a line of figurines that depict their waiting; all the heads are bowed before a door that is permanently closed. "The door is the dispensary," he said, "but it is also the world, kept shut by those who run the world." The next day, I saw a similar line of women and children, and fathers and children, in the cancer ward at the Al Mansour children's hospital. It is not unlike St Thomas's in London. Drugs arrived, they said, but intermittently, so that children with leukaemia, who can be saved with a full course of three anti-biotics, pass a point beyond which they cannot be saved, because one is missing. Children with meningitis can also survive with the precise dosage of antibiotics; here they die. "Four milligrams save a life," said Dr Mohamed Mahmud, "but so often we are allowed no more than one milligram." This is a teaching hospital, yet children die because there are no blood-collecting bags and no machines that separate blood platelets: basic equipment in any British hospital. Replacements and spare parts have been "on hold" in New York, together with incubators, X-ray machines, and heart and lung machines.

I sat in a clinic as doctors received parents and their children, some of them dying. After every other examination, Dr Lekaa Fasseh Ozeer, the oncologist, wrote in English: "No drugs available." I asked her to jot down in my notebook a list of the drugs the hospital had ordered, but rarely saw. In London, I showed this to Professor Karol Sikora who, as chief of the cancer programme of the World Health Organisation (WHO), wrote in the British Medical Journal last year: "Requested radiotherapy equipment, chemotherapy drugs and analgesics are consistently blocked by United States and British advisers [to the Sanctions Committee in New York]. There seems to be a rather ludicrous notion that such agents could be converted into chemical or other weapons."

He told me, "Nearly all these drugs are available in every British hospital. They're very standard. When I came back from Iraq last year, with a group of experts I drew up a list of 17 drugs that are deemed essential for cancer treatment. We informed the UN that there was no possibility of converting these drugs into chemical warfare agents. We heard nothing more. The saddest thing I saw in Iraq was children dying because there was no chemotherapy and no pain control. It seemed crazy they couldn't have morphine, because for everybody with cancer pain, it is the best drug. When I was there, they had a little bottle of aspirin pills to go round 200 patients in pain. They would receive a particular anti-cancer drug, but then get only little bits of drugs here and there, and so you can't have any planning. It is bizarre."

In January, last year, George Robertson, then defence secretary, said, "Saddam Hussein has in warehouses $275 million worth of medicines and medical supplies which he refuses to distribute." The British government knew this was false, because UN humanitarian officials had made clear the problem of drugs and equipment coming sporadically into Iraq - such as machines without a crucial part, IV fluids and syringes arriving separately - as well as the difficulties of transport and the need for a substantial buffer stock. "The goods that come into this country are distributed to where they belong," said Hans von Sponeck. "Our most recent stock analysis shows that 88.8% of all humanitarian supplies have been distributed." The representatives of Unicef, the World Food Programme and the Food and Agricultural Organisation confirmed this. If Saddam Hussein believed he could draw an advantage from obstructing humanitarian aid, he would no doubt do so. However, according to a FAO study: "The government of Iraq introduced a public food rationing system with effect from within a month of the imposition of the embargo. It provides basic foods at 1990 prices, which means they are now virtually free. This has a life-saving nutritional benefit . . . and has prevented catastrophe for the Iraqi people."

The rebellion in the UN reaches up to Kofi Annan, once thought to be the most compliant of secretary-generals. Appointed after Madeleine Albright, then the US representative at the UN, had waged a campaign to get rid of his predecessor, Boutros-Boutros Ghali, he pointedly renewed Hans von Sponeck's contract in the face of a similar campaign by the Americans. He shocked them last October when he accused the US of "using its muscle on the Sanctions Committee to put indefinite 'holds' on more than $700 million worth of humanitarian goods that Iraq would like to buy." When I met Kofi Annan, I asked if sanctions had all but destroyed the credibility of the UN as a benign body. "Please don't judge us by Iraq," he said.

On January 7, the UN's Office of Iraq Programme reported that shipments valued at almost a billion and a half dollars were "on hold". They covered food, health, water and sanitation, agriculture, education. On February 7, its executive director attacked the Security Council for holding up spares for Iraq's crumbling oil industry. "We would appeal to all members of the Security Council," he wrote, "to reflect on the argument that unless key items of oil industry are made available within a short time, the production of oil will drop . . . This is a clear warning." In other words, the less oil Iraq is allowed to pump, the less money will be available to buy food and medicine. According to the Iraqis at the UN, it was US representative on the Sanctions Committee who vetoed shipments the Security Council had authorised. Last year, a senior US official told the Washington Post, "The longer we can fool around in the [Security] Council and keep things static, the better." There is a pettiness in sanctions that borders on vindictiveness. In Britain, Customs and Excise stops parcels going to relatives, containing children's clothes and toys. Last year, the chairman of the British Library, John Ashworth, wrote to Harry Cohen MP that, "after consultation with the foreign office", it was decided that books could no longer be sent to Iraqi students.

In Washington, I interviewed James Rubin, an under secretary of state who speaks for Madeleine Albright. When asked on US television if she thought that the death of half a million Iraqi children was a price worth paying, Albright replied: "This is a very hard choice, but we think the price is worth it." When I questioned Rubin about this, he claimed Albright's words were taken out of context. He then questioned the "methodology" of a report by the UN's World Health Organisation, which had estimated half a million deaths. Advising me against being "too idealistic", he said: "In making policy, one has to choose between two bad choices . . . and unfortunately the effect of sanctions has been more than we would have hoped." He referred me to the "real world" where "real choices have to be made". In mitigation, he said, "Our sense is that prior to sanctions, there was serious poverty and health problems in Iraq." The opposite was true, as Unicef's data on Iraq before 1990, makes clear.

The irony is that the US helped bring Saddam Hussein's Ba'ath Party to power in Iraq, and that the US (and Britain) in the 1980s conspired to break their own laws in order, in the words of a Congressional inquiry, to "secretly court Saddam Hussein with reckless abandon", giving him almost everything he wanted, including the means of making biological weapons. Rubin failed to see the irony in the US supplying Saddam with seed stock for anthrax and botulism, that he could use in weapons, and claimed that the Maryland company responsible was prosecuted. It was not: the company was given Commerce Department approval.

Denial is easy, for Iraqis are a nation of unpeople in the West, their panoramic suffering of minimal media interest; and when they are news, care is always taken to minimise Western culpability. I can think of no other human rights issue about which the governments have been allowed to sustain such deception and tell so many bare-faced lies. Western governments have had a gift in the "butcher of Baghdad", who can be safely blamed for everything. Unlike the be-headers of Saudi Arabia, the torturers of Turkey and the prince of mass murderers, Suharto, only Saddam Hussein is so loathsome that his captive population can be punished for his crimes. British obsequiousness to Washington's designs over Iraq has a certain craven quality, as the Blair government pursues what Simon Jenkins calls a "low-cost, low-risk machismo, doing something relatively easy, but obscenely cruel". The statements of Tony Blair and Robin Cook and assorted sidekick ministers would, in other circumstances, be laughable. Cook: "We must nail the absurd claim that sanctions are responsible for the suffering of the Iraqi people", Cook: "We must uphold the sanctity of international law and the United Nations . . ." ad nauseam. The British boast about their "initiative" in promoting the latest Security Council resolution, which merely offers the prospect of more Kafkaesque semantics and prevarication in the guise of a "solution" and changes nothing.

What are sanctions for? Eradicating Iraq's weapons of mass destruction, says the Security Council resolution. Scott Ritter, a chief UN weapons inspector in Iraq for five years, told me: "By 1998, the chemical weapons infrastructure had been completely dismantled or destroyed by UNSCOM (the UN inspections body) or by Iraq in compliance with our mandate. The biological weapons programme was gone, all the major facilities eliminated. The nuclear weapons programme was completely eliminated. The long range ballistic missile programme was completely eliminated. If I had to quantify Iraq's threat, I would say [it is] zero." Ritter resigned in protest at US interference; he and his American colleagues were expelled when American spy equipment was found by the Iraqis. To counter the risk of Iraq reconstituting its arsenal, he says the weapons inspectors should go back to Iraq after the immediate lifting of all non-military sanctions; the inspectors of the international Atomic Energy Agency are already back. At the very least, the two issues of sanctions and weapons inspection should be entirely separate. Madeleine Albright has said: "We do not agree that if Iraq complies with its obligations concerning weapons of mass destruction, sanctions should be lifted." If this means that Saddam Hussein is the target, then the embargo will go on indefinitely, holding Iraqis hostage to their tyrant's compliance with his own demise. Or is there another agenda? In January 1991, the Americans had an opportunity to press on to Baghdad and remove Saddam, but pointedly stopped short. A few weeks later, they not only failed to support the Kurdish and Shi'a uprising, which President Bush had called for, but even prevented the rebelling troops in the south from reaching captured arms depots and allowed Saddam Hussein's helicopters to slaughter them while US aircraft circled overhead. At they same time, Washington refused to support Iraqi opposition groups and Kurdish claims for independence.

"Containing" Iraq with sanctions destroys Iraq's capacity to threaten US control of the Middle East's oil while allowing Saddam to maintain internal order. As long as he stays within present limits, he is allowed to rule over a crippled nation. "What the West would ideally like," says Said Aburish, the author, "is another Saddam Hussein." Sanctions also justify the huge US military presence in the Gulf, as Nato expands east, viewing a vast new oil protectorate stretching from Turkey to the Caucasus. Bombing and sanctions are ideal for policing this new order: a strategy the president of the American Physicians for Human Rights calls "Bomb Now, Die Later". The perpetrators ought not be allowed to get away with this in our name: for the sake of the children of Iraq, and all the Iraqs to come

© John Pilger

Paying the Price: Killing The Children Of Iraq, a documentary by John Pilger and Alan Lowery, will be on ITV this Monday at 9.30pm.