Official suspicions that UK machine tool exports were destined for Iraqi munition plants and that ministers had been briefed about the situation were among facts removed from the statement. The initial statement, by Anthony Steadman, the Department of Trade and Industry official responsible for export licences, referred to a Customs warning about Matrix Churchill's Iraqi links and that he had briefed ministers about the situation.
Another significant deletion from the statement was the fact that government guidelines restricting exports to Iraq had been amended but not announced.
Several deletions were made to the statement by a 'drafting committee of grandees' - senior government lawyers - culminating in a meeting attended by among others Gerald Hosker, then a senior DTI lawyer, and Andrew Leithead, an assistant Treasury solicitor, where it was decided to remove the references.
Gerald Hosker QC, now the Treasury solicitor, said officials made amendments to a witness statement to aid an anticipated claim of public interest immunity for confidentiality on Whitehall documents. Mr Hosker said the amendments were only 'advice' and were sent to Customs, the prosecuting authority, which was responsible for pointing out the changes to Mr Steadman, and that he could object to them if he wanted to.
Mr Steadman previously told the inquiry he accepted most of the changes because he was advised there were good legal reasons for the amendments. Mr Hosker said he gave Mr Steadman the opportunity of saying he was not happy with the changes. 'My personality is such that he could come back and talk to me. I feel sorry he could not take up my offer.'
Lord Justice Scott said: 'My trouble is the manner in which this might be perceived by an official like Mr Steadman. You are very grand figures in the department presenting him with what he had to say.' Mr Hosker admitted he had little litigation experience and was not familiar with the preparation of a witness statement. He only 'picked up' the Matrix case because two lawyers with more relevant experience were having their security clearances reviewed.
He admitted having little detailed knowledge of the prosecution, even though he was the senior DTI lawyer involved in the case.
He also acknowledged a limited expertise with Public Interest Immunity (PII) certificates and relied on Mr Leithead's expertise. He said his lack of detailed knowledge about the case and PIIs made him reluctant to query amendments made to the statement.
Vital intelligence information was not passed on because he 'did not need to know'. This included the fact that one of the defendants, the firm's managing director Paul Henderson, had passed information to the intelligence services.
He admitted the DTI made repeated attempts to get back its documents from Customs. He claimed this was to ensure advice DTI officials gave to ministers could be properly protected by PII certificates. He denied it was an attempt to make it harder for the defendants to get copies of documents which might prove their innocence.
Mr Hosker continues his evidence today.