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Steve Bannon addresses a GOP convention in Anaheim, Calif., on Oct. 20, 2017.FREDERIC J. BROWN/AFP / Getty Images

In the early days of Donald Trump's presidency, Steve Bannon was often viewed as the U.S. shadow ruler: the chief strategist shaping Mr. Trump's instinctual populism into a tough new brand of right-wing nationalism.

That partnership has exploded in dramatic fashion, with Mr. Bannon accusing members of Mr. Trump's family of "treasonous" behaviour and the President declaring the former adviser had "lost his mind."

The rupture comes amid a wider civil war within the Republican Party. Since he was ousted from the White House last August, Mr. Bannon has backed populist candidates against establishment figures in congressional primaries in a bid to remake the GOP caucus in his own ideological image. The President vacillated between supporting the party's leadership and encouraging Mr. Bannon, whom he still consulted regularly.

But the former aide crossed a line by attacking Donald Trump Jr. and Jared Kushner, the President's son and son-in-law, for meeting with a purported Kremlin operative at Trump Tower during the presidential campaign. The younger Mr. Trump agreed to meet lawyer Natalia Veselnitskaya in June, 2016, after he was told she would give him compromising information on Democratic nominee Hillary Clinton on behalf of the Russian government.

"Even if you thought that this was not treasonous, or unpatriotic, or bad shit, and I happen to think it's all of that, you should have called the FBI immediately," Mr. Bannon was quoted as telling author Michael Wolff. The comments, reported on Wednesday by The Guardian, are in Mr. Wolff's upcoming book about the Trump administration, Fire and Fury: Inside the Trump White House. The newspaper said it obtained an advance copy.

Mr. Bannon also called Mr. Kushner's business dealings "greasy," and predicted special counsel Robert Mueller's investigation would use accusations of money laundering to "crack Don Junior like an egg." The President's former campaign chair, Paul Manafort, who was also at the Trump Tower meeting, was charged in October with laundering millions of dollars in payments from pro-Russian groups in Ukraine. He maintains his innocence.

Mr. Manafort on Wednesday launched a lawsuit against Mr. Mueller and the U.S. Justice Department, alleging they should not have investigated his business ties because they were not related to Russian interference in the 2016 presidential election.

In a separate excerpt from the book, published by New York Magazine, Mr. Wolff portrayed Mr. Bannon as having used Mr. Trump as a conduit to power to implement his own ideas. Mr. Wolff wrote that Mr. Bannon saw the President as "a large and peculiar presence to both be thankful for and to have to abide" and "did not take him entirely seriously."

Mr. Trump dismissed Mr. Bannon's importance to his administration.

"Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind," the President said in a statement. He accused Mr. Bannon of exaggerating his role at the White House and leaking information to reporters. "It is the only thing he does well."

The President wrote that Mr. Bannon "doesn't represent my base" and is "simply seeking to burn it all down," while much of the Republican caucus is "very supportive of the Make America Great Again agenda."

Mr. Trump's lawyers said Wednesday the President would take "legal action" against Mr. Bannon for libel, slander and breaking a confidentiality agreement.

Mr. Bannon, for his part, described Mr. Trump as "a great man" and said he was still "tight on [the President's] agenda" in a pair of radio appearances late Wednesday and early Thursday. "You know, I support him day in and day out," Mr. Bannon said.

Gary Nordlinger, a Washington-based political consultant, described Mr. Trump's reaction as "damage control," because he could not allow someone of Mr. Bannon's standing to attack him unchallenged.

"I think it's both personal and professional," said Prof. Nordlinger, who teaches at George Washington University. "My biggest surprise is that Bannon would even say these things on the record to someone."

Mr. Bannon, a former investment banker and chairman of right-wing media organization Breitbart News, joined Mr. Trump's campaign as chief executive in August, 2016.

Mr. Bannon led the nationalist wing of the administration, overseeing the original ban on admitting citizens of several Muslim-majority countries to the United States. He was seen as so important to Mr. Trump's plan to overhaul or scrap the North American free-trade agreement that Prime Minister Justin Trudeau's principal secretary, Gerald Butts, went out of his way to court him. The pair regularly spoke by telephone or text message, and were seen together at the White House during Mr. Trudeau's first meeting with Mr. Trump last February.

The President was reportedly jealous of Mr. Bannon's reputation as the power behind the throne, and he was shown the door during a staff shakeup in the summer.

Mr. Bannon launched a war against the GOP establishment, backing anti-gay, anti-Muslim candidate Roy Moore in a special senate election in Alabama. While Mr. Moore beat establishment candidate Luther Strange for the nomination, he lost the general election to Democrat Doug Jones after allegations Mr. Moore had molested underage girls. Mr. Moore and Mr. Bannon had campaigned as much against GOP leaders – taking frequent aim at Senate Majority Leader Mitch McConnell – as against the Democrats.

At a rally the night before the election, Mr. Bannon warned "there is a special place in hell" for Republicans who did not support Mr. Moore. And his return to Breitbart gives him a platform to communicate with populist conservative voters.

Robert Shapiro, a political scientist at Columbia University, said Mr. Trump's aim on Wednesday was to claim his base's loyalty after realizing the GOP must be more unified.

"It's a way of signalling to members of Trump's base that, 'You're supporting me; Bannon was on the team before, but he's no longer on the team, so follow me.' The question now is: Will the base buy that? And I suspect it will," Prof. Shapiro said. "Trump has figured out that he is in trouble if the Democrats take the House and the Senate, and what he needs to do is be on the same team as the Republican establishment."

The party could barely contain its excitement over the President's evisceration of Mr. Bannon: Mr. McConnell's campaign Twitter account on Wednesday afternoon posted, without comment, a gif of the Kentucky senator cracking a wry grin.

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