Cover-up fear over 'too rigid' Scott inquiry: The credibility of the arms-for-Iraq investigation is being challenged, with critics calling for its scope to be widened. Chris Blackhurst reports

LORD JUSTICE SCOTT may never get to the bottom of the supply of arms to Iraq unless his inquiry hears evidence from City financiers and industrialists.

Critics of the much-vaunted inquiry fear it is sticking too rigidly to its brief and increasingly runs the risk of falling victim to a Whitehall cover-up.

David Clark, Labour's spokesman on defence, said yesterday that he was writing to Lord Justice Scott requesting that he turn the spotlight on the people who actually put the deals together. 'There is a very strong case for industrialists to be called before Scott,' he said.

The inquiry reconvenes today with the cross-examination of Kenneth Baker, the former Home Secretary. So far, most of the witnesses seen have been serving or former government ministers and Whitehall officials.

Mr Clark said that too much emphasis had been given over to politicians and senior civil servants, who are well versed in appearing in public and well rehearsed in what they should say.

He accused the inquiry of operating in a vacuum, of ignoring the role played at the sharp end by the City and by arms suppliers. He said that while Lord Justice Scott's remit was to explore the extent of Government knowledge of arms sales to Iraq, that should not rule out questioning people outside the Whitehall machine.

Mr Clark's intervention comes at a time of growing dissatisfaction with the inquiry among close observers and defence experts. The public spectacle of Margaret Thatcher being grilled by Presiley Baxendale QC, may reinforce an image of a far-reaching investigation going all the way to the seat of power, but in reality, they claim, it is not going anywhere near far enough.

Too many witnesses have been seen in private, they maintain, or not at all.

It has also become apparent that, despite the acclaim that greeted the setting up of the inquiry, Lord Justice Scott's powers are negligible. Witnesses do not give evidence on oath, nor can they be compelled to appear.

Lord Trefgarne, the former defence minister, told the Independent that he had still not made up his mind whether to attend. He replied 'no comment' when asked if it was true that he had yet to reply to two questionnaires from the inquiry. He received one last September and the second after Alan Clark's evidence.

As defence minister, Lord Trefgarne was closely involved in the negotiation of sales of arms to Jordan, some of which subsequently went to Iraq.

Other 'holes' in the inquiry's list of public witnesses include:

Sir John Cuckney: the ex-head of IMS, an MoD trading company, he was also deputy chairman of TI Group, the owner of Matrix Churchill prior to its sale to Iraq. Sir John also chaired 3i, the main shareholder in Astra, the failed ammunitions manufacturer that supplied Iraq.

Midland Bank: nobody has been called from the bank that in the 1980s boasted of its defence contacts and prowess in securing financing for deals. Stephan Kock, an adviser to the Joint Intelligence Committee, was consultant to Midland's defence equipment finance department.

ECGD: the Government department responsible for backing export orders had its own arms unit, PD7. Documents relating to Iraq at ECGD's City offices are kept secure, with access to them tightly controlled.

MoD sales and procurement: this vital bridgehead between the Government and the arms industry has so far remained immune from scrutiny. Sir Peter Levene, now the Prime Minister's efficiency adviser, was Chief of Defence Procurement from 1985 to 1991. Sir James Blyth, head of Boots, ran defence sales until 1985 before leaving to join Plessey. He was succeeded at the MoD by Sir Colin Chandler, the present Vickers chairman.

Sir John Bourn: before joining the National Audit Office, he was Deputy Under-Secretary of State at the MoD. At the NAO, Sir John oversaw the production of a memorandum for the Commons Public Accounts Committee on Al Yammamah, Britain's biggest arms contract. That memorandum is believed to contain details of commissions paid to Middle East middlemen. It has never been published.

Supergun: Scott has not heard evidence in public from Customs officers, or from executives at the manufacturing and transport companies who supplied the parts to Iraq.

Royal Ordnance: now part of British Aerospace, Royal Ordnance was a member of the 'European explosives cartel' that supplied material used in Iraqi weapons.

A professional adviser who has followed Scott from the outset acknowledged that to call all those witnesses would delay the inquiry's outcome beyond its expected August conclusion. Even so, that was better than a whitewash, he said: 'It depends whether time is more important than the truth.'

(Photographs omitted)