How two great British institutions came to lose their sense of proportion

Downing Street in early July was awash with feelings: but most of them were sorely misplaced

This was the day that all we reptilian media-people had been waiting for. The scourge of the Westminster press corps, Alastair Campbell, was up before the Hutton inquiry, and who among us did not want him, one way or another, to get his come-uppance? Just weeks before, the bullying colossus of Downing Street had strutted out of the Commons Foreign Affairs Committee with barely a scratch on his ample ego. Surely now he would meet his equal and opposite in that master of the lexical scalpel, James Dingemans QC.

Except that to treat the appearance by Mr Campbell as the highlight of the inquiry was a gross distortion. Lord Hutton's inquiry was not set up to facilitate a showdown between Alastair Campbell and the BBC - however much we journalists, and these two antagonists, might have wanted it. The inquiry was set up to establish what drove a government weapons scientist to suicide, 10 days after he had been named as the source of a contentious BBC report. And what is growing clearer by the day is that the same lack of proportion that elevated Mr Campbell to celebrity status yesterday has afflicted this misbegotten saga throughout. It may even help to explain how it began.

Through the hours of flat management jargon and impersonal disclaimers delivered by the government witnesses, it is possible to discern a sense of deep and very personal affront. The most neutral, and simultaneously revealing, account so far has come from the most unassuming and self-consciously professional of the civil servants, Sir David Manning, who has just become Britain's ambassador in Washington, but was then the chief foreign policy adviser at Downing Street. After giving a subdued account of the events that led up to Dr Kelly's "outing", he was asked to describe his feelings about the BBC report that had sparked the Government's ire.

This report, by the Today programme's defence correspondent, Andrew Gilligan, had quoted a senior intelligence official as claiming that the Governmenthad deliberately exaggerated the threat from Iraq by inserting the "questionable" information that Iraq could deploy lethal weapons within 45 minutes. Sir David couched his response in the language of high principle and government honour.

It was seen, he said, "as a pretty direct attack on the integrity of the Prime Minister and officials at No 10" because it implied that they might try to persuade the chairman of the Joint Intelligence Committee (JIC) to "massage or to revise his conclusions... for political convenience". Sir David said that he personally saw it also as an attack on the chairman of the JIC, because it assumed that he would be willing to do such a thing. And this was not the end of it: "I felt it was a very serious attack, not only, however, on the integrity of individuals, but a very serious attack on the integrity of the processes of government."

In an especially revealing conclusion, he added for good measure: "I did not see it, myself, as a row between two particular individuals, or between No 10 and a particular part of the media. I saw it as something where it was important that we tried to restore elements of trust which had been challenged by this very direct assault on the integrity both of people and of process..."

If this is how one of the country's most senior mandarins saw it, someone practised in the arts of cool reason and unemotional expression, someone, moreover, peripheral to the action, it is not difficult to imagine the response of those more intimately involved. The identification of the BBC's source and the urgent need to discredit either him or the BBC preoccupied some of the most powerful people in this country for days on end.

Northern Ireland was bubbling away, Mr Blair was preparing for his address to the US Congress and a tour of the Far East; hospitals, crime and immigration all pressed in on valuable government time. Downing Street, however, was the scene of something described as a "rolling meeting". Those present at any one time included, along with Sir David Manning and Alastair Campbell, the Downing Street chief of staff, Jonathan Powell; the Cabinet Office intelligence co-ordinator, Sir David Omand; the Defence Secretary, Geoff Hoon, and his chief civil servant, Sir Kevin Tebbitt; the chairman of the JIC, John Scarlett; and the Foreign Secretary, Jack Straw. And the sole subject of discussion was Dr David Kelly.

Yet there is no suggestion that the BBC, or even its correspondent, Andrew Gilligan, had the slightest inkling of what they were getting into when the first report on the "sexing up" of the Government's dossier was broadcast in the early morning of 29 May. And what has emerged ever more clearly from the Hutton inquiry is that the elements to which Alastair Campbell took most exception were the very elements which the BBC regarded as details.

For the BBC, it was the thrust of the report that made it so compelling. With no weapons being found in Iraq, Mr Gilligan had found an expert source who claimed to know that the Government had deliberately exaggerated the threat from Iraq to bolster its case for war. This was a strong story. Given that the dossier was but one pillar of the Government's case for war, though, the BBC probably did not see it as material for a British Watergate.

Downing Street, however, as Sir David Manning's testimony shows, took the story very personally. Its most senior staff indulged their own feelings, even as they disregarded those of David Kelly. Most of the government and Civil Service witnesses so far have admitted that Dr Kelly's reactions were hardly considered. One of the most hollow-sounding statements so far was the assurance that in everything that was done - including the second, "security-style" interview - "we wanted what was best for David". Downing Street in early July was awash with feelings; most of them sorely misplaced.

Almost unwittingly, Andrew Gilligan had found the Government's Achilles heel: the issue of Mr Blair's credibility. Officials scrambled for cover. Had the Prime Minister's credibility ratings been higher, the BBC's report might simply have been denied or ignored. With credibility at the root of the Government's problems, however, the public found the BBC's report all too probable and Downing Street needed another form of rebuttal.

Whether they needed David Kelly to say in person, on camera, that the BBC report was wrong is contestable. Senior officials in the Foreign Office believed it would be enough simply to publish the later versions of the Iraq dossier: this would have shown, they said, that it had been neither "transformed" nor "sexed up" and that whoever's fingerprints were on it, they were not Mr Campbell's. But that is not what happened. The real tragedy is that the person who kept his sense of proportion the longest and betrayed least sign of his distress was the scientist who found himself caught in the clash of two unduly sensitive institutions: David Kelly himself.

m.dejevsky@independent.co.uk