Tony Blair was under fire from all sides last night after appointing John Scarlett, who approved the "dodgy dossier" on Iraq, as the head of the Secret Intelligence Service, MI6.
Senior Labour backbench MPs joined Liberal Democrats and Tory leaders in accusing the Prime Minister of appointing Mr Scarlett as "the pay-off' for his support for the Government over the allegations that No 10 had "sexed up" the September 2002 dossier on weapons of mass destruction.
Mr Scarlett, the chairman of the Joint Intelligence Committee, who takes over as "C" from Sir Richard Dearlove, was a vital witness for the Government in the Hutton inquiry, which cleared Mr Blair, senior ministers and officials of exaggerating the threat from Saddam Hussein and his weapons of mass destruction.
Alastair Campbell, Mr Blair's former director of communications, who was also cleared by the Hutton inquiry, called Mr Scarlett a "mate".
There have been persistent reports of disquiet within MI6 at the prospect of Mr Scarlett taking over from the outgoing chief, Sir Richard. It had been widely assumed that the deputy head of the service, Nigel Inkster, would be the successor.
"John Scarlett has got his reward," said Diane Abbott, the Labour MP for Hackney North and Stoke Newington. "He was the firewall between the intelligence and security service and No 10. He was the person that stepped up and said there was no pressure put on the intelligence and security service to sex up the dossier; he was the one who said it was totally neutral, even though we know now that there were concerns in the intelligence services. It is too much of a coincidence."
Eric Illsley, a Labour member of the cross-party Commons Foreign Affairs Select Committee, which investigated the "dodgy dossier", said: "I was not surprised about his appointment in view of his defence of the Government's dodgy dossier. His appointment does raise doubts."
Matthew Taylor, the chairman of the Liberal Democrats' parliamentary party, said: "This is the pay-off." Sir Menzies Campbell, the Liberal Democrats' deputy leader and foreign affairs spokesman, said the appointment was "highly controversial".
Andrew Mackinlay, another Labour member of the Foreign Affairs Select Committee, called on Mr Scarlett to show his independence by modernising the parliamentary scrutiny over the intelligence services.
"We met his predecessor, Sir Richard Dearlove, in secret. He told us this meeting did not happen. We thought that was a nonsense and an insult."
Michael Howard, the leader of the Conservative Party, said the appointment was "inappropriate" while the inquiry into intelligence failures over Iraq was still being conducted by Lord Butler of Brockwell, the former cabinet secretary.
Mr Blair told journalists: "This was a recommendation by an independent panel. He is a fine public servant who has served Conservative and Labour governments for many years. It is very unfortunate if it becomes a point of political comment."
Downing Street last night denied any impropriety in the appointment of Mr Scarlett. The Prime Minister's official spokesman said a selection panel had put forward Mr Scarlett's name to Jack Straw, the Foreign Secretary, to agree, and it was finally approved by Mr Blair. "It was based entirely on merit," he said. No 10 said the same procedure had been followed during the appointment of Eliza Manningham-Buller as head of MI5 and David Pepper, the head of GCHQ.
The appointment came as the Government announced that the Hutton inquiry into the death of the weapons expert Dr David Kelly cost £2.5m.
SECURITY CHIEF WHO DEFIED HIS CRITICS
When Sir Richard Dearlove announced his retirement as the head of the Secret Intelligence Service, MI6, to become the master of Pembroke College, Cambridge, many in the espionage world were certain that John McLeod Scarlett would not be succeeding him. They were wrong.
Ironically, there was self-congratulation within MI6 when Mr Scarlett was made chairman of the Joint Intelligence Committee, a post usually occupied by a civil servant. Not only was he one of their own, but he had an impressive pedigree.
After a first in modern history from Magdalen College, Oxford, his SIS career started and continued for the next 30 years in a firm upwards trajectory. A fluent Russian speaker, he became the MI6 station chief in Moscow during one of the tensest periods of the Cold War, and played an important role in spiriting the defector Oleg Gordievsky out of the Soviet Union, just one step ahead of his KGB employers.
One of the mystiques of the post of "C" - the head of MI6 - is that next to nothing is known about him. Mr Scarlett is, however, a very public figure. During the Hutton inquiry hearings into the suicide of the governnment scientist David Kelly, he was even pictured on television leaving his home.
Mr Scarlett will have to retreat from the limelight. But no one doubts that private channels to Downing Street will remain open as long as Tony Blair remains in power.
It has even been reported that when when the Prime Minister was taken to hospital with heart problems in October last year, Mr Scarlett was among the first visitors. Many in the intelligence community had charged that the chairman of JIC was too damaged by what had emerged during the Hutton inquiry. The evidence showed that he had acquiesced to demands from No 10 to "sex up" the discredited Iraq weapons dossier. Mr Scarlett, who Alastair Campbell, Mr Blair's former communications chief, called his "mate", had become seduced by his proximity to power.
Some former members of British intelligence took the unusual step of publicly criticising Mr Scarlett for compromising his post. The Tory leader at the time, Iain Duncan Smith, who claims to have been misled by the JIC chairman over weapons of mass destruction, called him a "lying little shit".
It has also been reported that intelligence officials, giving evidence before the Butler inquiry, looking into intelligence failures leading up to the Iraq war, which is sitting in private, have decried the way secret information was used to justify the Government's case for war.
Such was the disquiet among serving members of MI6 that Sir Richard had taken the precaution of appointing another officer, Nigel Inkster, as his deputy, with a view to taking over. But in the past week there were persistent reports within the SIS that Mr Scarlett, 55, was going to get the job.
The Prime Minister, it appeared, was determined to reward the man who stood by him in the storm over Saddam Hussein's elusive arsenal of WMD. Only one name would be put forward for the Foreign Secretary, Jack Straw, to rubber-stamp.