Summonses were sent last week to the five, ordering them to appear before the inquiry during the week of 8 June. Sir William Macpherson, the chairman, has made it clear that a refusal to attend or answer questions would be treated as contempt, and initial indications were that they would turn up.
But after a hearing in chambers before Sir William last night, lawyers for the youths - Neil Acourt, 22, Jamie Acourt, 21, Gary Dobson, 22, Luke Knight, 20, and David Norris, 21 - said they planned to apply for judicial review on the basis that the decision either fell outside the inquiry's terms of reference, or the terms of reference themselves fell outside the scope of the relevant legislation.
Michael Holmes, solicitor for Mr Dobson, said that the application would relate to whether Sir William had the right to call the five before him. "I, on behalf of Gary Dobson, am not prepared to see this turn into a trial," he said.
The five youths were all charged with murdering Stephen, but the Crown Prosecution Service dropped the charges. A private prosecution by the Lawrence family led to Neil Acourt, Gary Dobson and Luke Knight being acquitted at the Old Bailey in 1996.
Sir William said last night: "These submissions will no doubt be opposed. The inquiry will, of course, continue hearing evidence meanwhile and still intends to call the five."
Earlier, the inquiry was told that the detective who led the murder investigation wrote a character reference for a former colleague who had been seen three times with Clifford Norris, a notorious criminal and father of David Norris.
Detective Sergeant David Coles faced an internal police investigation 10 years ago over his contact with Mr Norris but he was not disciplined.
Edmund Lawson QC, counsel to the inquiry, said the investigation led to DS Coles being disciplined for a separate matter, falsely claiming to have been at the Old Bailey when he had been on private business.
Former detective superintendent Ian Crampton, now retired, who was in charge of the Lawrence case for the first three days, had been DS Coles' superior officer at Bexleyheath station, in Kent, in the mid Eighties and supplied a reference for the disciplinary hearing in 1989.
But Mr Crampton, who has told the inquiry that the name Norris did not ring bells with him in April 1993 when he investigated Stephen's murder, said yesterday that he had not been aware of the background to the hearing.
The inquiry has heard allegations that the police investigation was obstructed by a link between Norris and an unidentified officer.
Mr Lawson said that DS Coles had been reported to the Metropolitan Police's Complaints Investigation Bureau in June 1988 by officers from Customs and Excise, who were investigating Norris at the time and spotted him in the company of the detective.
Mr Lawson said that Customs had told the inquiry team there was no basis for suggesting any connection between Norris and any officers on the Lawrence murder investigation.
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