Can Hutton explain why the Government refused a peace deal with the BBC?

What Greg Dyke did not know was that the Government was pausing before launching a fresh onslaught on the BBC
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Much discussion of the imminent Hutton report concentrates on whether the Government was morally right in the way it acted in the days and weeks before Dr David Kelly's death. There is a further, if subordinate question, however: whether a truce between the Government and the BBC might have been called much earlier than it was. For there isn't much doubt that on two occasions, both rather close together, a halt might have been called to the escalating conflict between the BBC and the Government in which Dr Kelly became engulfed.

The first came after Alastair Campbell gave his characteristically outspoken evidence to the Foreign Affairs Select Committee on 25 June. In it, the then No 10 Director of Communications and Strategy accused the BBC of itself telling a "lie" in reporting, as he put it, that he and the Prime Minister, among others, had persuaded Parliament "to send British forces into action on a lie." And in a slightly earlier passage, Campbell also suggested that there was an "agenda in large parts of the BBC" that resulted in a disproportionate focus on the case against war.

In subsequent and informal contacts between a senior member of the Labour hierarchy and a senior executive of the BBC, the basis of a pact was laid out. The BBC would admit - as it eventually did, much later, during the Hutton inquiry itself - that whatever other important truths it contained, the BBC reporter Andrew Gilligan's suggestion in a Mail on Sunday article that Campbell had been personally responsible for the claim that Saddam's unconventional weapons were primed to strike within 45 minutes of an order being given was not borne out by the facts. In return, Campbell would withdraw the charge of a "lie" and perhaps his implication - undoubtedly counter-productive for the Government - that the BBC had been informed all along by an anti-war agenda.

The parties to this proposal were not plenipotentiary. Both had to refer to their principals. On this occasion, it seems, however, that the BBC chairman Gavyn Davies was particularly resistant. Mr Davies had been less publicly belligerent in defence of the corporation's reporting than Greg Dyke, the Director General. But he also seems to have been more determined to resist a truce on these lines. Whether this was because, as some Labour politicians think, he was a known friend and supporter of the Government and was therefore especially anxious not to do anything which made him look like bending to its will, or whether he simply felt that this was a disavowal too far of BBC journalism, may never finally be established. He was, by all accounts, highly resistant to the proposal, perhaps more than Dyke would have been had it been put to him first.

On the second occasion, however, the resistance to the possibility of an accord was much more evident on the No 10 side. It's easy to forget that, when the Foreign Affairs Select Committee finally published its report on 7 July, it looked for a few hours as if the matter might - more or less - end there. The outcome had been messy. The committee had failed to reach a unanimous conclusion and had divided on party lines. One Labour MP Andrew Mackinlay voted with the Opposition minority against the crucial clause of the report, which concluded: "On the basis of the evidence available to us, Alastair Campbell did not exert or seek to exert improper influence on the drafting of the September dossier." Even the - defeated - minority clause did not suggest that Campbell had doctored the September dossier, only that the committee was not equipped to form a conclusion.

In other words, this was a result for the Government. No doubt the questions would have rumbled on. But Campbell could now argue with some conviction that he had been cleared. In the new atmosphere, Greg Dyke sounded a conciliatory and statesmanlike note in a speech at the Radio Academy Festival in Birmingham. He suggested that it "is time for both sides to agree to disagree and move on."

What Dyke did not know, of course, when he uttered those words was that the Government was merely pausing before launching a fresh onslaught on the BBC. Dr Kelly had by now come forward within the Ministry of Defence, identifying himself as a possible source of the Gilligan story. One interesting question about Lord Hutton's report will be how it handles the question of whether the fresh pursuit of the BBC was wise or anything like as inevitable as government witnesses suggested it was during the inquiry. Whether, indeed, it wouldn't have been a lot wiser, in its own interests as well as certainly in Dr Kelly's, to let matters rest there - or to pursue them as a confidential personnel matter within the MOD.

This isn't just a matter of hindsight. Even at the time, it wasn't easy to see quite why the Government wasn't - in gambler's parlance - quitting while it was ahead. The overwhelming impression is that the Government pressed on because it believed that the unmasking of Dr Kelly - whether through the medium of the Intelligence and Security Committee or by confirming his name after giving some broad hints about the type of official he was - was necessary because, in the first place, he was not actually an intelligence source, as the BBC report had suggested, though an expert and a knowledgeable one. And, secondly, because the Government had grounds for thinking that he might repudiate parts of the Gilligan story. A victory (over the BBC) could then be turned into a rout.

It's not just in hindsight that you have to wonder whether these gains offset the potential dangers of prolonging a row with the BBC beyond what could be - neutrally - seen as its natural life. If the FAC had found against Campbell, it would have been wholly understandable. But it hadn't.

Which is why government witnesses during the inquiry suggested that it had been willing to see Dr Kelly named in public because of a fear that it would be accused of a "cover-up" if he had hadn't been.

It's a great mistake, as he himself continually reminded the inquiry, to interpret Lord Hutton's interventions as evidence of his own attitude to what he has been investigating. There are nevertheless tentative signs that he was troubled by the explanation. At one point he even asked Jeremy Gompertz, the QC representing the Kelly family, whether he wanted to further question Sir Kevin Tebbit, the MOD Permanent Secretary, on this point - an invitation Mr Gompertz did not take up.

Maybe none of this much matters in the end. It isn't exactly a smoking gun. The question of why the Government pressed on as it did after the FAC report doesn't figure much in the very skilful summary of the Hutton issues produced by the Conservative Party. And Blair was entirely right on Sunday when he suggested all those who are interested should read the report very carefully before reaching their conclusions. But it reminds us, if nothing else, that Lord Hutton is entitled, whatever higher moral issues he addresses, to give a view on whether this was a government acting proportionately and in full command of its collective faculties.