Lyell 'failed to pass on Heseltine PII doubts': The Scott Inquiry: Prosecutor in Matrix Churchill case not told of reservations over 'gagging' order

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SIR NICHOLAS LYELL, the beleaguered Attorney General who goes before the Scott inquiry tomorrow with his political future in doubt, suffered another serious setback yesterday.

The arms-to-Iraq inquiry was told that assurances Sir Nicholas gave to Michael Heseltine, that his concerns about signing a 'gagging order' would be passed on to the Matrix Churchill trial judge, were never raised in court.

Alan Moses QC, the leading prosecution lawyer in the trial, told the inquiry that he was never informed about Mr Heseltine's fears.

The President of the Board of Trade initially refused to sign a Public Interest Immunity (PII) certificate saying he believed the case for disclosing them was 'overwhelming'. He agreed only after 'significant amendments' were made and Sir Nicholas told him he had a duty to sign.

Mr Heseltine told Lord Justice Scott that the Attorney General assured him in writing his concerns would be passed to the judge by Mr Moses. But Mr Moses said Sir Nicholas never mentioned Mr Heseltine's belief that the documents were relevant and should be made available to the defendants, when they met to discuss it three days after the assurances were made.

When Mr Moses addressed the trial judge, he said that there was essentially no difference between Mr Heseltine's certificate and more strongly worded certificates signed by Kenneth Clarke, Malcolm Rifkind and Tristan Garel-Jones.

'What I didn't take on board was that the president had expressed positive views as a matter of judgement about individual documents. What I don't recall at all is being told, 'Whatever you say, this is the president's view',' he said. Had this been the case he believed a separate lawyer would have had to represent Mr Heseltine at the hearings.

Despite regular contacts with the Attorney's legal secretariat and Treasury solicitors about the case, he said he had no recollection of Mr Heseltine's concerns being raised.

Mr Moses revelations could not have come at a worst time for the Attorney General, whose political future will be on trial when he gives his account of his involvement in the Matrix Churchill trial.

Sir Nicholas has said publicly that Mr Heseltine's certificate was expressly amended after consultation with Mr Moses. But Mr Moses said yesterday that he was faxed a copy of the Heseltine PII but did not know which parts had been objected to. It was the Attorney General who advised ministers they had a duty to claim PII for whole classes of documents, regardless of whether disclosure would damage public interest or prevent a fair trial.

Mr Moses said this use of PII had damaged the public's 'trust and faith' in the justice system. In future, PII should only be claimed if a document's contents justified it. Class claims were not necessary, he said. He understood the anger of ministers criticised for signing PII certificates in the Matrix case. 'Having regard to what happened in this case and to the criticism of ministers that I think, more properly, ought to have been directed to me, I can see a minister would be ill-advised to sign a certificate unless he was quite satisfied as to the reasoning of the prosecution, for fear that he was going to be accused of withholding documents or signing gagging writs which a judge has then ordered to be disclosed.'