Scott fights back over leaks

Arms-for-Iraq draft 'not critical of Thatcher'
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Westminster Correspondent

Sir Richard Scott moved yesterday to soothe government nerves about the "drip-drip" of leaks undermining his arms-to-Iraq inquiry.

In an unprecedented move, Sir Richard issued an extract of his draft report in response to a leak in the Independent yesterday which said that he was critical of Baroness Thatcher.

The judge's release was made in a letter to Lady Thatcher's office and said the newspaper had "drawn selectively" from the draft of his arms- for-Iraq report. He said he did not regard the paragraphs in the draft referring to Lady Thatcher "as critical of her conduct". Sir Richard and his team emphasised their concern at what they saw as attempts to undermine their work.

The letter was written after representations made to the inquiry by Julian Seymour, Lady Thatcher's private secretary.

Christopher Muttukumaru, the inquiry secretary, said the judge was mindful of the need to be fair and released details from his report despite the need to keep "circulation of extracts strictly limited". This had been highlighted, Mr Muttukumaru wrote, by the earlier leaks about William Waldegrave and John Major. "The events of the past three days illustrate the importance of this point."

The Independent leak concerned Chapter Four, "Government Statements on Defence Policy", of the judge's draft document. On 21 August 1989, Lady Thatcher replied to a voter who had asked for clarification about defence sales to Iraq. Mr Angel from Aircraft Equipment International had read of the proposed sale of Hawk aircraft to Iraq in the Financial Times. Under the Government's export guidelines, the sale would have been banned.

Lady Thatcher's reply was one of several sent by ministers on the same issue. "Each letter," says Sir Richard, "was a response to a query about government policy on the proposed sale of Hawk aircraft to Iraq. Each letter followed a draft prepared by the Foreign Office. Each letter said that 'since October 1985 government policy has prohibited the sale of any lethal equipment or defence-related equipment which could significantly enhance the capability of either side to prolong or exacerbate the conflict [between Iraq and Iran]', or words to that effect."

In the case of Lady Thatcher's letter, the text continued: "That policy still applies." The draft says: "These statements were not accurate."

Lady Thatcher, the draft states, had received and read a Ministry of Defence paper dated 20 July 1989 on the Hawk project, "in which reference was made to the 'more flexible interpretation of the guidelines for Iraq (but not Iran)' and so [she] can be said to have been placed on notice that a more liberal approach to defence sales to Iraq was being adopted than had previously been the case".

At this point the extract leaked to the Independent ended. In his letter to Lady Thatcher's office, Mr Muttukumaru said the judge's draft report goes on: "But the paper had been concentrating on Hawk and I do not think that Mrs Thatcher can be blamed if, when signing the letter of 21 August 1989, she did not recall the implications of the reference to the guidelines in the MoD's Hawk paper."

Mr Muttukumaru said the judge was surprised that the Independent did not complete the quotation. In fact, the leak to the Independent did not contain the complete quotation.

Scott inquiry sources refused to say whether the judge took the step after pressure from Lady Thatcher's office. He was angry at the BBC leak about Mr Waldegrave and Mr Major, even angrier at the leak to the Independent and regarded anything weakening the confidential nature of his report as harming the whole process.

Andrew Marr, page 17