British spies cannot be expected to give evidence in open courts and it only takes one case "blowing up" to damage the UK's national security, Kenneth Clarke said today.
The Justice Secretary defended his proposals to hold more civil hearings and inquests involving Britain's security services behind closed doors amid growing fears over "secret justice".
But he admitted he was "most unsettled" by the criticism from special advocates, the lawyers who would be involved in such proceedings, saying he was "very startled by their strong reaction".
The group, which included 19 Queen's Counsel, said the Government's plans "represent a departure from the foundational principle of natural justice" and "undermine the principle that public justice should be dispensed in public".
But Mr Clarke said the Government was faced with the choice of either not fighting a claim at all and agreeing damages, or turning to the "second best" option of using so-called closed material procedures.
Some 27 possible cases were in the pipeline, he said, but he warned that if just one of these cases gave an al Qaida cell the slightest indication of who had been turned or where the information was coming from, it could damage the UK's national security.
"One case blowing up our intelligence penetration of a group of people would be very, very bad from a national point of view," he said.
Mr Clarke told the Joint Committee on Human Rights: "Of course it's not as good as open justice. If open justice was available we would prefer that, but it is a way in which the judge can have all the relevant evidence put before him or her.
"The alternative is nothing. The alternative is inquests which are adjourned or a case which is never fought.
"We either have no evidence or we have an admittedly second best way of presenting it."
He insisted that some of the claims from critics, such as inquests into friendly fire deaths being held in secret, were "ridiculous", but said open courts "can't be calling MI6 officers".
"It's quite extraordinary to imagine you can just go ahead with an ordinary open justice approach," he said.
The controversial reforms are said to be aimed at improving the way information from the security services, including MI5 and MI6, is handled while still protecting national security.
But the plans to hold civil hearings in secret have been criticised by civil rights campaigners and have even been deemed "fundamentally unfair" by the group of specialist lawyers who would be involved in such cases.
Shami Chakrabarti, director of civil rights group Liberty, said: "Even if this policy were limited to so-called national security cases, the 7/7 inquest would have been shut away from the public and victims' families.
"The Government can't point to a single case where judges have compromised state secrets under the current law. The fight goes on."
Clare Algar, executive director of Reprieve, said the proposals "would wreck our justice system and put politicians and officials above the law".
"Ministers clearly have not thought this through. They must now listen to reason and change course," she said.
It also emerged the Ministry of Justice impact assessment on its proposals to reform so-called closed material procedures (CMPs) found that "vetting and/or exclusion may be seen as excessive or intrusive, leading to resentment or a reduction in confidence in court processes".
The impact assessment said "family members may resent the use of CMPs during inquests" and also warned of a "higher risk of potential security breaches due to a larger number of individuals accessing sensitive information".
It said: "The Government's willingness to settle out of court to protect such information suggests that the value of such information is significantly high. Therefore any potential breaches may impose substantial costs to UK security."
Last July the highest court in the land ruled that secret evidence cannot be used in trials of civil damages claims in a judgment hailed as a "victory for open justice".
The Supreme Court upheld the Court of Appeal's decision that courts did not have the power to order a CMP for the whole or part of a trial of a civil claim for damages.
It followed secret multimillion-pound payouts to 16 terrorism suspects, including former Guantanamo Bay detainee Binyam Mohamed, last November after they claimed they had been mistreated by security and intelligence officials.
Mr Clarke said justice was not being served under the current system and national security was being put at risk.
Under the plans, an impartial and independent judge would have the power to review the Government's statement that national security would be damaged if evidence were openly disclosed, helping to "ensure that closed procedures are only used where absolutely necessary", he said.
The special advocates in civil courts, such as those already used in cases involving the security services heard by the Special Immigration Appeals Commission, would be able to examine secret documents in closed hearings.
Mr Clarke said: "You only need one case to go wrong. If you suddenly alert some al Qaida cell in such a way that they guess who it is you've turned and where your information is coming from, or they suddenly realise that you've got a technique which enables you to intercept things that they didn't realise you were capable of intercepting and you have done some very considerable damage.
"We think there are 27 such cases, but in the worst scenario, one case blowing up our intelligence penetration of a very dangerous group of people would be very, very bad from a national point of view."
Referring to settling the Guantanamo Bay cases, Mr Clarke said: "I would have liked those cases to have been heard through to a judgment.
"But we weren't able to do that because we could not give the evidence in closed proceedings."
He went on: "I don't believe justice should ever take place behind closed doors unless there is an extremely compelling reason. National security can be one of those reasons."Mr Clarke admitted that Mohamed's case risked damaging the UK's intelligence relationship with the United States amid claims Briton released US intelligence that was not already in the public domain.
"Binyam Mohamed has unsettled them, it's too late to go back on that case, that's all water under the bridge," he said.
"But since Binyam Mohamed there's real concern about whether we are going to get the full-hearted co-operation with the Americans that we do actually need to provide proper security to our population and to our interests."
He went on: "That case has given rise to difficulty.
"Are we saying that a judge should be able to disclose the contents of intelligence that we have received in confidence from the Americans or any other allies who shared it with us.
"The risk is, and it's a real risk, is that if that possibility occurs our allies will not share the intelligence with us. They don't share intelligence with us taking a chance.
"If we start exposing our confidentiality to the risk that it might be exposed in a British court I personally have been persuaded that we run the risk of a reduced level of cooperation with Americans and others who simply will not give us the material."
Asked if intelligence which revealed a risk to life was being withheld from us, Mr Clarke said the importance of the material was often only known once it could all be seen together.
"We don't collaborate with the Americans on trivial matters," he said.
"They rely on us collaborating with them as well. It makes an enormous difference."
Mr Clarke added: "It's just possible after Binyam Mohamed that people have been intrigued by the idea of getting hold of American intelligence by this rather obscure process."
Proposals in the justice and security green paper would limit the role of the courts in cases in which individuals are seeking disclosure of sensitive material, where the Government is not otherwise involved - so-called Norwich Pharmacal applications - which have previously been used in alleged torture cases.
A white paper is expected before the Queen's Speech, Mr Clarke said.
Later, Ms Algar added: "At last it seems that the message is starting to get through to the Government, that their plans for a vast expansion of secret justice are deeply unfair.
"But it isn't enough just to be 'unsettled' - it's time actually to act on the warnings of the people who know these processes from the inside, and who say they are fundamentally unfair."
Isabella Sankey, director of policy for Liberty, said: "It's no surprise that having started with such sweeping proposals the Government now hints at concessions, but minor nips and tucks won't make this chilling policy palatable.
"Secret courts for national security cases would have left CIA kidnap and torture victims locked out of their own civil claims and excluded bereaved relatives from the 7/7 inquest."