Michael Flynn, who on Friday admitted lying to the FBI, has agreed to work with investigators looking into Russian election meddling as part of a plea bargain.
He is prepared to say that Donald Trump "directed him to make contact with the Russians”, according to a bombshell report by ABC News.
The claim sent the US stock market tumbling and brought the Russian election scandal a step closer to the Oval Office in a dramatic day in Washington.
Jared Kushner, Mr Trump’s son-in-law, was also named in US media reports as another figure who asked Flynn to reach out to officials from Russia, among other countries.
The White House fought back on Friday night, labelling Mr Flynn a “former Obama administration official” who spent just 25 days in the Trump administration.
The row overshadowed news that Mr Trump has enough Senate votes to pass major tax cuts in what would be his biggest legislative victory.
Allegations that Mr Trump’s campaign colluded with the Russian government - blamed for hacking Democratic Party emails during the campaign - to win the election have dogged his first year in office.
Flynn is the first White House official to be charged as part of an investigation into Russian election meddling led by special counsel Robert Mueller.
Three other Trump campaign figures – Paul Manafort, Richard Gates and George Papadopoulos – were charged in October.
Flynn, a former general and senior intelligence official, played a prominent role in Mr Trump’s campaign and became US national security adviser after the election victory, before resigning a month later over his conversations with the Russian ambassador to the US.
On Friday he pleaded guilty to lying to the FBI on January 24 – just four days after Mr Trump’s inauguration – about conversations he had with the Russian ambassador Sergey Kislyak.
Flynn admitted to urging Mr Kislyak not to hit back at new American sanctions on Russia during a meeting in December 2016, after Mr Trump won the election.
He also conceded he had asked the Russian ambassador to delay a vote on a UN security council resolution in the same month.
That is believed to be a reference to a resolution condemning Israel's settlements in Palestinian territory, which Mr Trump opposed but Mr Obama’s administration planned to sit out.
Profile | General Michael Flynn
While neither admission proves collusion between the Trump campaign and the Kremlin before the election, it suggests that after victory Trump advisers were reaching out to Russia to undermine Mr Obama’s policies.
The more significant development could be Flynn’s willingness to work with investigators, given the central role he played during Mr Trump's campaign.
Flynn has agreed to detail how “a senior official” of Mr Trump’s transition team at his Mar-a-Lago resort discussed what to tell the Russians, according to prosecutors.
Details about what another “very senior member” of the Trump transition team said about the UN vote are also set to be revealed.
Numerous US media outlets named Mr Kushner, who is married to Mr Trump's daughter Ivanka, as the unnamed figure who discussed the UN vote.
ABC News, the US broadcaster, went a step further by saying Flynn is prepared to say that Mr Trump “directed him to make contact with the Russians".
Flynn’s decision to work with Mr Mueller’s investigation in turn for leniency comes after reports his son Michael Flynn Jr, was being looked into.
There were reports Flynn was facing paying more than a million dollars in legal fees if he did not co-operate and would even have to put his house on sale.
In a statement Flynn said: “After over 33 years of military service to our country, including nearly five years in combat away from my family, and then my decision to continue to serve the United States, it has been extraordinarily painful to endure these many months of false accusations of 'treason' and other outrageous acts.
"Such false accusations are contrary to everything I have ever done and stood for. But I recognize that the actions I acknowledged in court today were wrong, and, through my faith in God, I am working to set things right. My guilty plea and agreement to cooperate with the Special Counsel's Office reflect a decision I made in the best interests of my family and of our country. I accept full responsibility for my actions."
Ty Cobb, the White House lawyer, said: “Today, Michael Flynn, a former National Security Advisor at the White House for 25 days during the Trump Administration, and a former Obama administration official, entered a guilty plea to a single count of making a false statement to the FBI.
“The false statements involved mirror the false statements to White House officials which resulted in his resignation in February of this year. Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn.
"The conclusion of this phase of the Special Counsel's work demonstrates again that the Special Counsel is moving with all deliberate speed and clears the way for a prompt and reasonable conclusion.”
US stock markets took an initial hit after the news, with the Dow Jones dropping 1.4 per cent and the S&P 500 falling 1.6 per cent before rallying later.
James Comey, the former FBI director fired by Mr Trump, reacted by quoting the Bible in a tweet: “But justice roll down like waters and righteousness like an ever-flowing stream."
8:57PM
Jared Kushner 'directed Flynn to contact Russians'
Jared Kushner, Mr Trump's son-in-law, is reportedly the senior official who directed Flynn to contact Russian officials, NBC News reported, citing two sources.8:28PM
Flynn's son: Family is the most important thing
Mr Mueller had placed intense pressure on Flynn, threatening to bring legal proceedings against his son, Michael Flynn Jr, unless he agreed to "flip" and tell everything he knew to the investigation.It was probably no coincidence that he then went straight to his son's house. Michael Flynn Jr, holding Flynn's grandson, opened the door and Flynn touched the baby on the head.
7:42PM
Who is Michael Flynn?
Profile | General Michael Flynn7:37PM
Senator: 'This is a story you can't make up'
More from Senator Mark Warren, the Senate intelligence committee's top Democrat, who is bemused by today's news.The Democratic senator for Virginia questioned Mr Trump's position on the news.
7:34PM
Ted Cruz: Today's news is 'disappointing and distrubing'
Texas senator Ted Cruz: "Today's news was disappointing and disturbing. General Flynn has many decades of honorable service defending this nation and it is sad to see that he is now pleading guilty to criminal conduct."7:27PM
Jared Kushner to be probed again
Lawmakers will want to again interview U.S. President Donald Trump's son-in-law turned White House adviser Jared Kushner in the wake of Flynn's guilty plea as part of the US special counsel's investigation, the Senate intelligence panel's top Democrat said."There are a number, like Mr. Kushner and others, that we're going to want to invite back," Senator Mark Warner said. He refused to say whether that would include Vice President Mike Pence.
Mr Warner added that he remained confident in the panel's Republican chairman, Richard Burr.
Yesterday the New York Times reported that Mr Trump had told Mr Burr that he was eager to see the committee's investigation end.
5:57PM
Flynn: Past few months have been 'painful'
Mr Flynn released a statement following his guilty plea: "After over 33 years of military service to our country, including nearly five years in combat away from my family, and then my decision to continue to serve the United States, it has been extraordinarily painful to endure these many months of false accusations of "treason" and other outrageous acts."Such false accusations are contrary to everything I have ever done and stood for. But I recognize that the actions I acknowledged in court today were wrong, and, through my faith in God, I am working to set things right. My guilty plea and agreement to cooperate with the Special Counsel's Office reflect a decision I made in the best interests of my family and of our country. I accept full responsibility for my actions."
5:46PM
US markets hit by Flynn revelations
The S&P 500 and Dow Jones dived as much as 1.6pc and 1.4pc, respectively, but have since pared some of their losses, Tom Rees reports.The latter is currently sitting on a 0.6 per cent loss but the dollar is having less luck, having erased all of its gains against the pound.
CMC Markets analyst David Madden gave his review of the action on the markets in the US this afternoon:
"US markets sold off sharply after the news broke that Michael Flynn, the former national security adviser (NSA) chief is expected to plead guilty in relation to the Russia investigation. Mr Flynn is will cooperate with the government agencies and could implicate President Trump.
"Republicans in the Senate delayed voting on the tax reform so they could patch up the tax bill before pressing ahead with the vote. The GOP want to ensure all the loose ends are tied up and that sceptical Senators are brought on side. Dealers are sensing that progress is being made, but seeing as that a lot of the bill is already priced, they are now in wait and see mode."
5:44PM
Former FBI director James Comey's take on the news
Mr Comey was fired by the President while he was leading the investigation into whether Trump campaign members colluded with Russians who hacked the 2016 election. Mr Trump said he was firing Mr Comey because of the way he handled the investigation into Hillary Clinton's emails.5:32PM
Trump's key tax vote overshadowed
The news has overshadowed what should have been Mr Trump's greatest achievement in office to date - a radical overhaul of the tax system - a key policy for the administration.In the last hour Senate Republican leader Mitch McConnell announced the chamber had enough support to hold a vote on the biggest US tax cut in three decades.
A handful of senators opposed to the plan, including Republican John McCain, have agreed to support the legislation after receiving reassurances about the $1 trillion addition to the US deficit brought by the tax cuts.
4:52PM
White House lawyers deny Flynn's comments implicate any other officials
The White House's attorney, Ty Cobb, said: “Today, Michael Flynn, a former National Security Advisor at the White House for 25 days during the Trump Administration, and a former Obama administration official, entered a guilty plea to a single count of making a false statement to the FBI.“The false statements involved mirror the false statements to White House officials which resulted in his resignation in February of this year.
"Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn.
"The conclusion of this phase of the Special Counsel's work demonstrates again that the Special Counsel is moving with all deliberate speed and clears the way for a prompt and reasonable conclusion.”
Mr Flynn, a former director of the Defense Intelligence Agency, was sacked as National Security Adviser by President Donald Trump after it emerged he misled Vice President Mike Pence about the extent of his contacts with Mr Kislyak.
4:52PM
US stocks and dollar fall following Flynn testimony
The US dollar has fallen sharply following Mr Flynn's testimony in court, with some reports suggesting the former national security adviser is willing to testify against the president himself.Stocks in New York also tanked within minutes of the news. The S&P 500 has shed 1.3pc of its value while the dollar has dived 0.5pc against a basket of the leading global currencies.
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