Phillip Knightley: From No 10 with love - why is New Labour so passionate about spies?

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One of the Hutton inquiry's little surprises concerns the relationship between the Labour Government and the top ranks of the British intelligence community. They are in love.

Downing Street's outgoing director of communications, Alastair Campbell, regards John Scarlett, once our top spy in Moscow and now chairman of the Joint Intelligence Committee, as "a mate". Tony Blair is grateful for the help the intelligence services gave in the preparation of the dossier on the threat posed by Iraq. At the urging of an unnamed spymaster, the Secret Intelligence Service (SIS) empties its files, trying to find a few nuggets to help make the dossier even stronger.

All parties concerned have nothing but flattering comments to make about each other. Scarlett says there were "no rows" with Campbell, or anyone else. Campbell passes on the Prime Minister's congratulations on the dossier - "a very good job". Scarlett insists there was no unease in the intelligence community about political pressure influencing the contents of the dossier. It is all sweetness and light - except for the Defence Secretary, Geoff Hoon, who was apparently often kept in the dark.

What is going on? Historically, the Labour Party and the SIS have hated each other. The very nature of intelligence and security work makes most officers natural conservatives and wary of the Labour Party which, especially during the Cold War, they saw as soft on communism. One Labour prime minister in particular, Harold Wilson, felt that the secret services had too much power, confronted them, and came off second best.

At the height of the Cold War, a group of MI5 and SIS officers believed that their services had been penetrated by the KGB. When Roger Hollis, chief of MI5, refused to allow them to investigate their fellow officers, they decided that he, too, must be working for the Russians.

This rogue group then set about investigating their own boss. They devoted years to compiling a secret dossier on Hollis and, even after he had retired, managed to persuade his successor to allow them to conduct an official investigation. No proof emerged and the investigating team was disbanded.

But the rogue officers felt that the services were covering up to avoid a scandal. So one of them, Stephen de Mowbray of SIS, approached No 10 and sought an interview with Wilson. The prime minister was stunned when he learnt of the case against Hollis, and arranged for Lord Trend, former secretary of the Cabinet, to carry out yet another inquiry. It, too, found no evidence that Hollis had been a Soviet agent.

The rogue officers did not like this, and when damaging rumours about the Wilson government began to spread in Whitehall, Wilson decided they might be out to get him. Certainly some of them believed that Wilson was, if not a Soviet agent, then certainly a Soviet asset.

In August 1975 Wilson summoned the director of SIS, then Maurice Oldfield, and the head of MI5, then Michael Hanley, and asked them point-blank if they were trying to bring down his government. Both replied that they were not. But Wilson did not believe them.

Given this poisoned history, the question provoked by Hutton is: how did Blair win over British intelligence? How did he incorporate such traditional enemies of Labour into Blairism? A bigger budget, more officers and more power are obvious answers. But there has to be more to it than that. Spy bosses realised Blairism was so different from the socialism of old Labour that it could be trusted to defend the realm as strongly as the Conservatives had.

For its part, can it possibly be that the Blair Government was seduced by the illusory glamour that the secret world holds for the uninitiated?

Phillip Knightley is the author of 'The Second Oldest Profession' (Pimlico)