'Muddled' communications that left officials in the dark

Widespread failures among Whitehall departments to make proper use of intelligence prompted Sir Richard to urge changes in the system, though he concedes he is not qualified to suggest what these should be.

These failures caused errors in the way that some material was distributed to Government departments; in many cases the right people did not receive the correct information when necessary. The inquiry had "disclosed a failure on a number of occasions for proper use to be made of available intelligence".

However, the Cabinet Office last night responded to the criticisms by saying that steps had been taken in recent years to improve the handling of information. William Waldegrave, the Chief Secretary to the Treasury, immediately seized on that aspect of the report saying it proved that he had not "connived" in allowing the machine tools for arms manufacture to go to Iraq. He added that Sir Richard accepted that, had the correct intelligence reports reached Mr Waldegrave, he would have barred the trade.

Key to the intelligence failures were a number of Government departments. Within the Defence Intelligence Staff, the report says, there was a failure to ensure that relevant intelligence received was brought to the attention of the Defence Sales desk. "Within the Foreign and Commonwealth Office and the Department of Trade export licensing unit there were periods when the relevant official was unable to read intelligence reports because he had not yet received the requisite security clearance. This

The Iraqi "Supergun" first came to Whitehall's attention in June 1988. The Ministry of Defence, Department of Trade and Industry and the security services themselves "went further than mere muddle" in their inadequate reactions to the steady flow of information, the report said. The information about Project Babylon was reported to Ministers on the so-called intelligence channel, says Sir Richard, but in an abbreviated form which gave no indication of the involvement of British companies. The later investigation by the Secret Intelligence Service into the underlying facts was "inadequate" and its report "apt to mislead"', with the result that the senior officials who were directly involved were left unaware of the true facts.