Scott demands missing documents: Papers with minister's notes not disclosed to inquiry. David Connett reports

LORD JUSTICE SCOTT sharply criticised Ministry of Defence officials yesterday for failing to supply vital ministerial papers on arms exports to his inquiry.

The judge said he was 'astonished' to discover that documents used by the former Defence minister, Lord Trefgarne, had not been disclosed.

He requested the missing documents, which had the minister's handwritten comments about intelligence reports on them, within 24 hours. He said it was 'highly important' the inquiry was provided with all annotated documents.

The judge chanced upon the documents when Alan Barrett, a senior MoD official responsible for maintaining guidelines restricting exports to Iraq, read out the comments written on his copy. The Scott inquiry team had documents without annotations on them.

The inquiry was set up to discover the extent of ministerial knowledge of breaches of government guidelines limiting defence exports to Iraq. It relies heavily on Whitehall supplying relevant papers - the inquiry has received an estimated 135,000 pages to date.

The judge was also critical of officials for allowing a pounds 37m machine-tool export order to Iraq in 1987. The order included 141 lathes built by a company which was later renamed Matrix Churchill.

The judge asked: 'What were these machine tools going to be used for at a time of war? They were not going to be used to make washing machines. They were obviously going to be used to make armaments.' When Mr Barrett said no one suspected their military purpose, the judge said: 'How can you not have any suspicions given the state of the war at that time. It almost beggars belief.'

The judge said one inference from the decision to allow the order was that no one was paying attention to the guidelines. Mr Barrett disagreed.

After approval was given, an MI6 intelligence report revealed they were destined for an Iraqi munitions factory making artillery shells, and breached the guidelines. Despite the urgency of the report and the fact that not all the lathes had left Britain, officials failed to act for over a month.

Ministers later decided not to revoke the export licences because MI6 'feared for the safety of their source' and believed 'far more important information' would be discovered about Saddam Hussein's activities. Such information was in British and Western interests and outweighed a 'technical breach' of the guidelines, Mr Barrett said.

Intelligence from other sources, which might have protected MI6's source as well as preventing the guideline breaches, was not shown to ministers, Mr Barrett admitted.

He denied that MPs and members of the public who questioned Britain's export policy to Iraq were misled. He admitted answers given were 'consistent with what ministers intended to be published' - not what was happening.

He said a document outlining a more liberal export policy for Iraq was given a high security classification to avoid leaks. He denied this was to avoid answering difficult questions about it. 'If difficult questions can be avoided then they will be avoided,' he said.

The inquiry continues today.