Exclusive: MPs to oversee security services: MI5 and MI6 to answer to Privy Council but GCHQ operation will remain out of bounds

MI5 and MI6 are to be brought under the scrutiny of MPs for the first time, a senior Cabinet minister confirmed yesterday. The Prime Minister will announce in the next session of Parliament that a committee of Privy Councillors is to be set up.

However, Privy Councillors are likely to be prevented from carrying out an oversight of GCHQ, the Government's intelligence gathering communications operation, because of the sensitivity of its links with US agencies, including the CIA.

The establishment of the committee is part of John Major's commitment to greater open government. The committee will write a report to be presented to the House of Commons. In May 1992, after the general election, the Prime Minister surprised MPs by announcing his plan to throw off Whitehall's 'cobwebs of secrecy' and put MI6, the secret intelligence service, on to a statutory footing like MI5, which is responsible for security in Britain.

The legislation on MI6, to be announced in the Queen's Speech, will be used as the vehicle to establish the committee for oversight of MI5. Labour MPs will argue that it does not go far enough. They want MI5 and MI6, with GCHQ, to be brought under the more open scrutiny of the Tory-dominated Commons select committee on home affairs, chaired by Sir Ivan Lawrence.

Mr Major has had to overcome resistance within the civil service and among Cabinet colleagues. Kenneth Clarke, the Chancellor, refused to allow Stella Rimington, MI5 head, to give evidence to the home affairs committee when he was Home Secretary.

Mrs Rimington indicated her readiness to be more open by giving six members of the committee lunch at her office, but that led to a cloak-and-dagger drive to MI5's former headquarters from Parliament which resembled a scene from a John le Carre novel.

Mrs Rimington last month became the first MI5 head to appear in public when she invited the press into the organisation's new headquarters to launch the publication of a leaflet on its operations. But she insisted on going off the record when briefing the press.

The Government has chosen to give the task of scrutiny to a committee of Privy Councillors, who are likely to include peers, because they are already under an oath of secrecy. The Privy Council comprises senior ministers, former ministers, and party leaders who are appointed by the Prime Minister as part of the honours system.

Mr Major is certain to prefer trusted ex-Cabinet ministers versed in security matters, such as former Home Secretaries, who will be handpicked. That could invite further criticism that they will be too pro-establishment.

The committee of Privy Councillors is certain to cross-examine Mrs Rimmington as one of its priorities, but access to secret information will be limited. One source said: 'They will want to know about spending by MI5, and to satisfy themselves that the Cabinet is not being bugged, but they will not be given operational details.'

One of the members' first inquiries may be into the lavish expenditure by MI5 and MI6 on new headquarters on opposite sides of the Thames near the Houses of Parliament. Although supposed to be secret, the organisations have two of the most prominent office blocks in the area.

The committee is also likely to investigate continuing public concern about the bugging of intimate telephone conversations by the Prince and the Princess of Wales. A commissioner, appointed to check on interceptions, discounted MI5 involvement in the 'Camillagate' tapes, but that has failed to stop speculation.

The timing of the scrutiny is also important. MI5 has recently taken over from the police the co-ordinating role in Britain for anti-terrorist action by the security forces.

It is spearheading the counter-terrorist operation against the IRA campaign. There is some criticism that some county special branch forces are not up to the task of tackling hardened terrorists, and the Privy Councillors are certain to seek assurances that the police and the intelligence services are improving their performance.

Since the ending of the cold war, MI6, the spy network under the control of the Foreign Office, has been forced to seek a new role, concentrating more on international operations against illegal drugs and mafia-style gangsters.