Frantic calls behind Kennedy's 'political' decision to stay out

Long before the inquiry was announced yesterday, deep disquiet about its remit and scope was being expressed behind the scenes at Westminster. The phone calls between the Prime Minister and the opposition leaders, Michael Howard and Charles Kennedy, about the terms of reference of the Butler committee were frantic.

As the private negotiations continued on Monday evening, a planned announcement about its terms by the Foreign Secretary had to be postponed.

MPs expressed concern that the inquiry, led by Lord Butler, an "establishment" former Whitehall mandarin, could be a "whitewash" in the way some have portrayed the Hutton report. Would it include the reasons the Government went to war and its interpretation of intelligence or would politicians escape scrutiny and censure, MPs were asking each other.

In one phone call between Mr Kennedy and Tony Blair on Monday night the Prime Minister was told in no uncertain terms that the terms of the inquiry he was offering were inadequate. The Liberal Democrat leader told Mr Blair that his party would boycott the Butler inquiry because it would not scrutinise the role played by the Prime Minister and other members of the Cabinet in interpreting intelligence material. "It was a political decision not to take part," said a Kennedy aide. "It was Charles's decision that we could not play ball."

The Liberal Democrats' decision is a setback for Mr Blair in his attempts to end the damaging row over the existence of WMD in Iraq. It will give the party the freedom to criticise the inquiry and its conclusions because it has played no part.

Mr Howard believes he succeeded in broadening the terms of the inquiry in his discussions with the Prime Minister, and he agreed to a place on the committee for Michael Mates, the former Conservative Northern Ireland minister.

The terms of reference outlined to MPs yesterday included investigating "the accuracy of intelligence on Iraqi WMD up to March 2003, and to examine any discrepancies between the intelligence gathered, evaluated and used by the Government before the conflict".

The reference to the intelligence "used" was crucial in allowing Mr Howard to maintain that the investigation would extend to the way ministers that presented assessments by the Joint Intelligence Committee.

At Westminster yesterday the exact terms of the inquiry and whether politicians' decisions would be scrutinised appeared ambiguous. Mr Blair, in his evidence to a committee of senior MPs, implied that the scope could include government decision-making, while insisting it could not be an inquiry into why Britain had gone to war.

"I think there are issues to do with intelligence, to do with intelligence gathering and evaluation and use by government which we can look at," he said.

But in the Commons yesterday Jack Straw said the Hutton inquiry had already dealt with the charge that that the Government had "acted improperly or dishonestly in using the intelligence available to it". He told MPs: "Echoing the conclusions of the earlier reports, and in categorical terms, Lord Hutton made emphatic last week that such allegations were unfounded. This new inquiry will obviously not be revising the issues so comprehensively covered by Lord Hutton."

Unlike the inquiry ordered by President George Bush, which will not reveal its findings until after the US presidential election in November, the committee established by Mr Blair has been given until July to report, a tight time-scale designed to avoid overshadowing a possible election in spring 2005.

Sir Menzies Campbell, the Liberal Democrat foreign affairs spokesman, suggested that Mr Blair had been bounced into offering an inquiry after repeatedly refusing Liberal Democrat calls for one, because President Bush announced an investigation on Monday. "The Government has performed a welcome volte-face on the principle of an inquiry for which we must give President Bush full credit," he said.

"But there is still time to have an inquiry which will truly satisfy the public interest. The Government should take that opportunity."

There were claims last night that not all Liberal Democrat MPs supported the move to opt out of the inquiry. But Mr Kennedy insisted it was the unanimous decision of his MPs.

The Prime Minister's official spokesman conceded there had been a "major difference of view" with the Liberal Democrats over the inquiry. Mr Kennedy, who opposed the war on Iraq, said the remit for the inquiry was "unacceptable" and would be "unlikely to command public confidence". He said he wanted the "fundamental question, 'Did you go to war on a false premise'?" to be examined.

"There is now widespread disbelief about the stated reasons for our participation in the war in Iraq," he said.

"That disbelief is undermining public trust in the office of the Prime Minister. The way to re-establish that trust would be to have an inquiry which addresses the key questions directly and openly. It does not seem to me that this inquiry will be able to do that."

THE PANEL MEMBERS

SIR JOHN CHILCOT

A career diplomat, who is a staff counsellor for the security and intelligence services and for the National Criminal Intelligence Service.

He joined the Home Office from Cambridge University, working with ministers such as Willie Whitelaw and Merlyn Rees. In 1990, he moved to the Northern Ireland Office as permanent secretary, and acted as a link-man between the IRA and John Major's government, helping to pave the way for the Good Friday Agreement.

In 2002, Sir John, 64, was called in to investigate the IRA break-in at the government buildings at Castlereagh in which Special Branch files were stolen. He is understood to have recommended that MI5 be given control of security, eroding the role of the Police Service of Northern Ireland.

LORD INGE

Aformer chief of the defence staff (1994-1997) whose service record includes postings in Germany, Libya, Malaya and Hong Kong. The 68-year-old peer is highly regarded in the Lords as a fair-minded and decisive figure with "masses of common sense".

The field marshal, who was a senior serving officer during the Falklands War, may prove the most independent member of the committee and unlikely to kowtow to the Government. One colleague described him as "very, very direct" and "not easily impressed by waffle". "They will not pull the wool over his eyes," said another. "He may ask pretty pointed questions."

He is a former deputy chairman of the Historic Royal Palaces and was made acrossbench peer in 1997. He sits on a parliamentary committee on the European Union.

LORD BUTLER OF BROCKWELL

An establishment figure who is unlikely to rock the Government's boat. He is a former head of the Home Civil Service, serving five prime ministers including Edward Heath and Harold Wilson, and was principal private secretary to Margaret Thatcher from 1982 to 1985.

Lord Butler, 66, who was educated at Harrow and Oxford, served Tony Blair during the first year of his premiership. He told the 1996 Scott inquiry into "arms to Iraq that "half the picture can be true". As a former Whitehall mandarin, he is well qualified to examine the minutiae of advice given by the intelligence services. But his appointment has raised questions about whether he would be inclined to criticise his political masters. When he was Cabinet Secretary in the early 1990s, his investigation of the former cabinet minister Jonathan Aitken, who was later jailed for perjury, was considered cursory. He also told the Scott inquiry: "While ministerial heads of departments must always be accountable for the actions of their departments and its staff, neither they nor senior officials can justly be criticised for shortcomings of which they are not aware."

MICHAEL MATES

A veteran Tory backbencher and former Northern Ireland minister, Mr Mates, 69, is well versed in intelligence matters.

He has been a member of the parliamentary Intelligence and Security Committee since 1994 and also chairs the all-party Select Committee on Northern Ireland Affairs. He has also chaired the Commons Defence Committee. He was forced to resign as a minister in 1993 after giving the fugitive tycoon Asil Nadir a watch inscribed with the message: "Don't let the buggers get you down".

A former military intelligence officer and lieutenant-colonel in the Queen's Dragoon Guards, he has been an MP since 1974, first for Petersfield and later East Hampshire. He comes from the left wing of the Tory party and campaigned for Michael Heseltine and Kenneth Clarke in their leadership battles of 1990 and 1997.

ANN TAYLOR

A trusted Blair loyalist, Ms Taylor went from Westminster enforcer to scrutinising the intelligence and security services. The 56-year-old MP for Dewsbury was chosen by Tony Blair to chair the parliamentary Intelligence and Security Committee after being dropped as Chief Whip after the last general election. She presided over a major inquiry into the use of intelligence in the approach to war in Iraq, which cleared Alastair Campbell of "sexing up" the Government's dossier on Iraq's weapons of mass destruction.

Ms Taylor has been an MP since 1974, representing Bolton West until 1983 and the West Yorkshire constituency of Dewsbury thereafter. She served in the Cabinet as Mr Blair's first Leader of the Commons in 1997 before being moved to the Whips Office in 1998.