Downing Street forced into the open on discredited spies

Twenty four hours of Government bluster ended yesterday when Downing Street admitted it had failed to reveal that crucial intelligence underpinning the dossier on Iraq's weapons of mass destruction had been discredited.

Twenty four hours of Government bluster ended yesterday when Downing Street admitted it had failed to reveal that crucial intelligence underpinning the dossier on Iraq's weapons of mass destruction had been discredited.

Downing Street was forced to issue a defence of its decision not to reveal to Lord Hutton and the Intelligence and Security Committee (ISC) that information which helped Tony Blair claim that Saddam Hussein was a "serious and current threat" had been withdrawn by MI6.

The Prime Minister's official spokesman said it would have been "improper" to reveal that a piece of intelligence had been withdrawn because it was "still being investigated as a sensitive operational matter" at the time of Lord Hutton's inquiry. He said Mr Blair only learnt of the development as a result of Lord Butler's report.

He said wider questions of intelligence were outside the remit of the Hutton inquiry and that the information was still being validated at the time.

The comments came after the Government spent a day refusing to discuss the details of the report, sticking to its insistence that Mr Blair had been cleared of acting in bad faith.

But No 10's line shifted significantly after a close reading of the Butler report showed that neither Lord Hutton nor the ISC were told that the controversial intelligence had been withdrawn.

Downing Street faced renewed questions after the Health Secretary, John Reid, who is regarded as the Prime Minister's "Mr Reliable", faced a mauling over the issue on BBC Radio 4 yesterday.

Pressed repeatedly to explain why ministers had not admitted that key intelligence had been withdrawn, Mr Reid told the Today programme: "I have no idea whether any of these people were even informed of this allegation you are making. You are asking me a question I can't answer.

"I know that Butler on the question of good faith and putting information into the public domain misleadingly has confirmed for the fourth time that the Government acted in good faith, that the intelligence services acted in good faith."

He accused the BBC of "prejudiced opinion", claiming the corporation had ignored Lord Butler's most important findings because of an obsession with identifying scapegoats. He said: "You are not actually interested in addressing the problems of intelligence but in hunting for somebody to blame."

The Government bluster had started when questions about the discredited intelligence from Iraq surfaced on Thursday morning at the regular briefing for political correspondents. Tom Kelly, the Prime Minister's official spokesman, said he was not going to be drawn into the detail of the Butler inquiry.

Pressed on the issue, he said: "He [Mr Blair] continues to believe that the central reasons he had put forward for going to war remain as valid today as they had been at the time.

"Our belief that Saddam Hussein had been a threat had been validated by Lord Butler's report, which had found that the Prime Minister had acted in good faith."

Five hours later, No 10 was still expressing bafflement at the story and was refusing to be drawn on the details.

The Government's discomfort was also in evidence when the Foreign Secretary, Jack Straw, the most senior minister to break cover during the day, faced pointed questions over MI6's withdrawal of the intelligence at a lunch for political journalists.

Mr Straw was wrong-footed by the questions, and accused journalists of "over egging" the claim. He said: "The dossier did not depend on one single piece of intelligence. Our judgements depended on the context, which included the last Unscom [United Nations weapons inspector's] reports."

By yesterday morning, however, the story had gathered pace after The Independent's front page revealed that both Lord Hutton and the ISC had been misled.

REID AT BAY

Extract from the 'Today' Programme yesterday

Carolyn Quinn: "Why wasn't the fact that evidence which was used in the dossier - has now been withdrawn in July last year - and when the Hutton inquiry took place in August, the Prime Minister, Geoff Hoon, the Defence Secretary, John Scarlett, Sir Richard Dearlove all had the chance of doing exactly what you are saying..."

Dr John Reid, Health Secretary: "Carolyn, Carolyn..."

CQ: "And saying we now realise that this evidence has been discredited and we want to inform you now?"

JR: "Carolyn, I have no idea whether any of those people were even informed of this allegation that you are making. I have no idea. Incidentally, nor do you..."

CQ: "But the intelligence services..."

JR: "Nor do you have any idea....."

CQ: "Well, we do. The Butler report. The Butler report says that John Scarlett knew".