A federal grand jury dramatically charged top White House aide I. Lewis "Scooter" Libby on Friday with lying to investigators in a CIA leak probe that has rocked US President George W. Bush's administration.
Libby, 55, announced his resignation as Vice President Dick Cheney's chief of staff after he was indicted in a case which ignited fresh controversy over the US rationale for war with Iraq.
He faces one count of obstruction of justice, two counts of perjury and two counts of making false statements to investigators and to the grand jury probing the leaking of the identity of a CIA agent.
Libby faces as many as 30 years in jail and a US$1.25 million fine if convicted on all five counts laid by special prosecutor Patrick Fitzgerald, which raises the prospect of a gripping and potentially politically damaging trial.
Bush's political guru, Karl Rove, also in Fitzgerald's sights during a two-year probe, was not indicted, but will remain under investigation, his lawyer said.
"When citizens testify before grand juries, they are required to tell the truth," said Fitzgerald, who has previously indicted Osama bin Laden, politicians and mobsters. "The requirement to tell the truth applies equally to all citizens including persons who hold high positions in government."
Fitzgerald was tasked with finding out whether senior Bush administration officials broke the law by knowingly exposing CIA agent Valerie Plame.
Plame's husband, former diplomat Joseph Wilson, had claimed her cover was blown to discredit him, after he questioned whether the Bush administration had "twisted" intelligence in the push to war with Iraq.
The indictment was a severe blow to Bush after the defeat of his Supreme Court pick Harriet Miers and his struggles with high gasoline prices, falling approval ratings and the fallout from Hurricane Katrina.
Libby's exit is also seen as a loss to a White House in which his boss, Cheney, has wielded real influence, particularly on foreign policy.
"He functions as a chief of staff, but he also knows Cheney's thinking on defense and national security issues better than anyone else," says James Mann, author of a book about the Bush administration's war Cabinet, Rise of the Vulcans.
Bush said the proceedings were "serious" but praised Libby, saying "Scooter has worked tirelessly on behalf of the American people and sacrificed much in the service to this country."
Libby said in a statement that he had done nothing wrong.
"I am confident that at the end of this process I will be completely and totally exonerated," he said.
Fitzgerald alleged that Libby lied to FBI agents who interviewed him on Oct. 14 and Nov. 26, 2003, and to the grand jury in March last year.
The charges said Libby obstructed the course of justice by impeding the grand jury investigation into the unauthorized disclosure of Plame's identity.
He was not, however, charged with knowingly blowing the cover of Plame, the alleged offense that triggered Fitzgerald's investigation.
Fitzgerald told Rove, meanwhile, that he had not decided yet whether to indict him, Rove's lawyer Robert Luskin said, adding he was confident his client would be cleared.