Iraq's US overseer Paul Bremer announced that a non-political army would be created in its place as he stepped up efforts to reassure nervous Iraqis that Saddam's brutal 24-year reign is now firmly a part of history.

"These actions are part of a robust campaign to show the Iraqi people that the Saddam regime is gone and will never return," a senior official from the US-led coalition said.

Bremer's decree, which came one day after around 200,000 "full" members of Saddam's Baath Party were ordered to turn themselves in, dissolved the regular army, the Republican Guard and the defense and information ministries.

It also effectively scrapped the Revolution Command Council, the inner sanctum of Saddam's power that extended from the central planning of his socialist economy to the intelligence web that smothered Iraqis' daily lives.

"Most of these will not be replaced because they have no place in a free society," said another coalition official, who also asked not to be named.

"The coalition provisional authority plans to create, in the near future, a new Iraqi corps. This is the first step in forming a national self-defense capability for a free Iraq," the first official said.

"Under civilian control, that corps will be professional, non-political, militarily effective and representative of all Iraqis."

An estimated 300,000 soldiers and around 2,000 employees of the information ministry were put out of work by the order, which also eliminated other paramilitary groups that were part of Saddam's armed forces.

Lower ranking soldiers would in theory be allowed to apply to join the new force.

"It has not been approved yet but everyone in the coalition agreed that this is something we will move forward with this summer," said US Lieutenant General David McKiernan, the commander of coalition ground forces in Iraq.

"It's a concern when you have a large segment of the population, young and male, who are former soldiers and who are unemployed," he said.

In practice the army was already dissolved by the US and British military victory that brought Saddam down but former soldiers have protested on the streets of Baghdad demanding their back pay and a role in Iraq's future.

The order said that employees and eligible personnel would be paid around one month's salary in severance, and that war widows and retirees would continue to receive their pensions.

Unless they prove otherwise, however, officers with the rank of colonel and higher will be prohibited from the payments because they will be assumed to have been high-ranking Baath members, the official said.

De-Baathification has emerged as one of the most emotionally and politically charged issues in post-war Iraq, fuelled in part by an initial US willingness to work with senior Baath members in its effort to rebuild the nation.

Hospital sources say dozens of Baath members have been assassinated in the weeks since Saddam was toppled and Iraqi political parties have pressed the US-led coalition to make sure the Baath does not claw its way back to power.

The coalition has blamed some of the crime that has rocked post-war Iraq on gangs of Baathists which it says have been regrouping with intent to undermine both its authority and the reconstruction process.

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