NEW YORK, April 26 (Reuters) - Recent letters from the U.S. Justice Department to Congress state that intelligence agents working on counter-terrorism can legally use interrogation techniques that might otherwise be banned by international law, The New York Times reported in its Sunday editions.

The Justice Department's interpretation shows the Bush administration is contending that the boundaries should have a degree of latitude, the Times said, despite the president's order last summer which he said meant the CIA would hew to international norms on the treatment of detainees.

The United States has faced heavy criticism from rights groups and some allies for its use of a simulated form of drowning known as "waterboarding" during interrogations and for holding hundreds of suspected militants in a prison camp at a U.S. naval base at Guantanamo Bay, Cuba.

A March 5 letter from the Justice Department to Congress makes clear the Bush administration has not set boundaries for which interrogation methods might violate the ban in the Geneva Conventions on "outrages upon personal dignity," the Times reported.

"The fact that an act is undertaken to prevent a threatened terrorist attack, rather than for the purpose of humiliation or abuse, would be relevant to a reasonable observer in measuring the outrageousness of the act," Brian Benczkowski, a deputy assistant attorney general, wrote in one letter.

The Times said the letters were provided by the staff of Sen. Ron Wyden, an Oregon Democrat and member of the Senate Select Committee on Intelligence.

The committee had received classified briefings on the matter and Wyden had requested further information, which yielded the letters, the paper said.

A senior Justice Department official, speaking to the Times on condition of anonymity, said of the classified information: "I certainly don't want to suggest that if there's a good purpose you can head off and humiliate someone."

But he said "the fact that you are doing something for a legitimate security purpose would be relevant."

"There are certainly things that can be insulting that would not raise to the level of an outrage on personal dignity," the official said.

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