LEADING ARTICLE : The cost to us all if Waldegrave and Lyell survive

Back in the real world, people who fail in their jobs are demoted, side-lined or sacked. In Westminster, they survive and sometimes prosper. This week, John Major's reaction to the Scott report has demonstrated that his administration has become a safe house for failures. His defence of Sir Nicholas Lyell and William Waldegrave stands in a great British tradition - have sympathy for the honest failure.

They failed at their jobs. Time and again, they failed when asked to make critical judgements. That is the conclusion of the Scott report. Yet because they honestly thought they were acting in good faith and without intent to deceive, we should let them off. If William Waldegrave is so confident that this should be his approach to good conduct, let him try when he next travels on a motorway: "Sorry, officer - I was going 150 miles an hour. My foot slipped but I had not intention to do so."

Mr Major knew Mr Waldegrave had for years lived in a fantasy world, reassuring MPs that defence sales to Iraq were still tightly controlled even as lorry- loads of weapon-making tools were being shipped to Baghdad. He also knew that Sir Nicholas, the Government's chief legal adviser, had made such a mess of the Matrix Churchill trial that innocent men nearly ended up behind bars.

In short, Mr Waldegrave had shown himself to be just as deluded as Sir Nicholas was incompetent. They survive because the qualifications for holding a ministerial post are so low.

Yesterday, some newspapers joined Mr Major in praising the pair with faint damns. "The tale is one of muddle, blunder and a few half-truths," explained the Daily Mail. "Both merit mockery. Neither should be sacked." (It's a good job neither of the pair are single mothers.) The Daily Telegraph concluded that the honourable ministers are "not guilty but faulty".

There were also attempts to unpick the report's central findings. Some government supporters have compared the secrecy surrounding defence equipment sales to Iraq with secret talks with the IRA before the republican ceasefire in 1994. This is a false analogy. Parliament was misled over the IRA talks in the cause of peace. There was nothing noble about helping Saddam Hussein to build up his armaments.

Others have alleged that the inquiry was really about nothing more than technical and legal questions and that Sir Richard took it upon himself to elevate it into a more ambitious affair. This is nonsense. The issues at stake in the report go right to the heart of British politics. They are - industrial policy and the future of our manufacturing base, Britain's post-colonial role in the the world after the end of the Cold War - the principles that should govern our trade with non-democratic regimes. These are not technicalities. They are troubling political and moral questions that can only be settled through open debate. That is the point Sir Richard has made but the Tory party still has not managed to understand it.

Which brings us back to the Conservative Party's mistaken defence of its two hapless ministers. If this Government cares at all about the reputation of politics and the institutions of democracy, it should see to it that both resign. Their continued presence at the Cabinet table will do permanent damage to standards of behaviour in public life and public trust in the political process. The price Mr Major is prepared to pay for the party political advantage of keeping his Cabinet intact is a further undermining of public faith in politics. He may see out the immediate storm over the Scott report, but at the cost of leaving his government permanently stained with the brush of incompetence and dishonesty.

For the stupidity that Sir Richard ascribes to William Waldegrave, a former Fellow of Oxford's most prestigious college, All Souls (it must be re-examining its entrance requirements), is not only improbable, but it also fails to redeem him. He may have done his best, but his best involved him misleading MPs on a crucial issue of foreign policy; his best is not good enough. The same goes for Sir Nicholas, whose legal errors make him unfit for office.

Both men are mistaken in believing that Sir Richard, by acknowledging their good faith and integrity, has saved their careers. He has merely - and with extraordinary generosity and attention to fairness - made it possible for them to resign honourably.

Mr Waldegrave and Sir Nicholas must resign quickly if the notion of ministerial accountability is to have real meaning. If they do not resign, John Major's government will be stained as unaccountable and arrogant, riding roughshod over Britain's unwritten constitution. It will also be hypocritical. An administration that prides itself in setting out tough performance standards for other professions such as teachers will be seen as excusing itself from these rigours.

Do not take that from us. Listen to what yesterday's editorial in the Sun had to say. It warned that democracy demanded that decisions made "in the name of the people should be communicated to the people ... the wheeling and dealing of arms sales, in which one day's enemy is the next day's ally, cannot be kept secret to protect ministers from embarrassment."

Tory backbenchers, having cheered their side through the first day of publication, should take a closer look at the Scott report and appreciate the dangers to democracy that it highlights. The Conservatives, after nearly 17 years in power, may have become complacent about the need to place checks upon government. But they should realise that within a year, they could face being Opposition. They may be grateful then for any safeguards they introduce now.

As for John Major, he must realise that his trenchant defence of his ministers is having repercussions beyond issues of defence equipment sales. The Prime Minister's stubborn attitude is a gift to David Trimble, the Ulster Unionist leader, who plans to exact a heavy price for backing the Government over the Scott report. The nature of any concessions required to secure Mr Trimble's support for Messrs Waldegrave and Lyell can only strike fear into those trying to keep the Irish peace process alive.

The danger is that John Major will destroy his most creditable policy of securing peace in Northern Ireland in a last bid to defend the indefensible. As for Mr William Waldegrave and Sir Nicholas Lyell, that means the Prime Minister must let them go.