John Major was responding to a challenge by Labour in the Commons about a report in the Independent that MI6 had warned the Attorney General's office that its contacts would be compromised if the prosecution of Matrix Churchill by Customs and Excise went ahead.
The Prime Minister told MPs Sir Nicholas had made clear he had no knowledge of any approach by MI6 to him or to his office asking that the Matrix Churchill prosecution should be stopped. This mirrored a statement by Sir Nicholas's office which said: 'The Attorney General has no knowledge of any approach by M16 to him or his office asking that the Matrix Churchill prosecution should be stopped.'
However, a senior Whitehall source told the Independent last night that the MI6 approach may have been informal. It was not suggested that it had been made directly to Sir Nicholas.
Directors of Matrix Churchill were supplying MI6 with information on Saddam Hussein's arms programme and MI6 officers have given evidence in camera to the Scott inquiry into the arms-to-Iraq affair.
Sir Nicholas, who is to appear before the Scott inquiry next week, faced further questions about his future from Labour MPs.
Derek Fatchett, Labour spokesman on industry, wrote to Sir Nicholas seeking confirmation that no approach was made by MI6 before, during or after the collapse of the trial, and to publish the representations made by other government departments.
'Sir Nicholas's position becomes more impossible by the day,' Mr Fatchett said.
A spokesman for the Scott inquiry said it had no knowledge of the suggestion that MI6, also known as the Secret Intelligence Service (SIS), had given evidence in camera about approaches to the Attorney General's office.
'Our recollection is that no evidence has been given by SIS officers at any 'in camera' hearing that they 'warned the Attorney General to call off the prosecution' in the Matrix Churchill case. All the evidence will be checked again. If there is evidence of that kind, it will be fully explored in the appropriate manner.'
The inquiry team had sent a comprehensive request to Sir Nicholas for evidence.