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The House of Commons Foreign Affairs Committee investigated two dossiers published by the government in the run-up to war, one of which included the controversial claim that Saddam's weapons of mass destruction were deployable within 45 minutes.
Deputies also probed a BBC report quoting an intelligence source who said that the 45-minute claim was inserted into the dossier -- thus beefing up the case for war -- despite the reservations of Britain's intelligence services.
The allegations have prompted a bitter row between the BBC and the Labour government, while Blair has been under fire for weeks over his handling of the Iraq war, with polls finding that voters are losing trust in him.
A report by the parliamentary committee said that in a government file published last September, the 45-minutes claim was given undue prominence and said the language used in the dossier was "more assertive than that traditionally used in intelligence documents".
"We conclude that the 45-minutes claim did not warrant the prominence given to it in the dossier, because it was based on intelligence from a single, uncorroborated source. We recommend that the government explain why the claim was given such prominence," the deputies said in their report.
The committee pointed out that without access to the original intelligence it could not know if it had been "faulty or misrepresented".
But the inquiry, on which deputies from Blair's ruling Labour party have a majority, cleared any minister of misleading parliament.
The committee concluded that "in the absence of reliable evidence that intelligence personnel have either complained about or sought to distance themselves from the contents of the (September) dossier, allegations of politically-inspired meddling cannot credibly be established".
The deputies cleared Blair's key aide and powerful director of communications Alastair Campbell of exerting "improper influence" in the drafting the September file.
However, the committee was scathing in its criticism of a second government dossier, published in February, saying Blair had inadvertently "misrepresented its status" by telling parliament it contained "further intelligence" without having been informed of its provenance.
Labelled the "dodgy dossier" by the press and politicians, that file featured in part an uncredited paper by a post-graduate student in the United States.
"We conclude that the effect of the February dossier was almost wholly counterproductive. By producing such a document the government undermined the credibility of their case for war," which began on March 20 and led to the downfall of Saddam's regime, deputies said.
They added it was "wholly unacceptable" for the government to plagiarise work without attribution. It was "fundamentally wrong" for such a document to be presented to parliament without ministerial oversight.
The committee also said that "continuing disquiet and unease about the claims made in the September dossier are unlikely to be dispelled unless more evidence of Iraq's weapons of mass destruction programme comes to light".
Blair has for weeks been forced to defend the way he handled the Iraq conflict.
A poll last week found two-thirds of voters did not trust him, while a survey last month showed most people here believe Britain and the United States deliberately exaggerated evidence that Iraq had weapons of mass destruction in order to win support for going to war.
There were no signs Monday that the controversy was over, with both the government and the BBC claiming they had been vindicated by the parliamentary inquiry.
Foreign Secretary Jack Straw called on the BBC to apologise for its reporting on the September dossier.
Speaking to journalists in Downing Street, Straw said the committee's report had demonstrated that "the central and most damaging allegation against the government, that we inserted the 45-minutes intelligence into the dossier whilst knowing it to be untrue and against the wishes of the intelligence agencies, has been shown to be false".
But the BBC said in a statement: "We believe the decision to highlight the circumstances surrounding the 45-minutes claim has been vindicated."
WAR.WIRE |