Mounting anger over 'toothless' royal inquiry

Doubts over the credibility of the inquiry by St James's Palace into issues arising from the Paul Burrell trial deepened yesterday with the news that it will have no access to police, bank or tax records.

Scotland Yard and the Inland Revenue, which are likely to hold data relevant to the internal inquiry ordered by Prince Charles, said they would be legally barred from fully co- operating with the palace if it sought information. Criticism has mounted of the decision to keep the inquiry "in-house", with senior MPs warning that it leaves the Royal Family open to accusations of a whitewash.

At least three of the four areas marked for investigation by Sir Michael Peat, the Prince's private secretary, could rely on independent information to corroborate or disprove findings. They include whether staff received improper payments or sold gifts and the palace's handling of a rape allegation, reported to the Metropolitan Police in 1996.

But experts said the lack of judicial status means Sir Michael and Edmund Lawson QC, the barrister assisting the inquiry, will be powerless to demand information from outside bodies or witnesses. Geoffrey Bindman, of the Society of Labour Lawyers, said: "This inquiry has no more teeth than any other internal investigation ... There will be no powers to access records held by other bodies or to subpoena witnesses to give evidence."

One employment lawyer said: "It is an obvious cover-up. This inquiry has no power to get to the material facts and it is headed by a man who is a material witness. Is he going to cross-examine himself?"

The St James's Palace inquiry was at the centre of a bid this week to end the damage caused by a fortnight of lurid allegations. They stemmed from the collapse of the trial of the butler, who was accused of stealing royal property until the Queen intervened.

Lawyers said Sir Michael will be asked to look at claims for which independent records would be crucial. This included the allegation that royal officials covered up a claim from a valet, George Smith, that he was raped in 1989 and sexually assaulted in 1995 by an aide to Prince Charles.

Scotland Yard said yesterday that it would respond in an "appropriate manner" to any requests from St James's Palace but a source added: "If that request amounts to access to statements or information given in confidence, then we would not and could not give it."

The inquiry also concerns press claims that Michael Fawcett, an aide to Prince Charles, helped sell official gifts liable to tax in return for a commission and that the 50 staff at St James's Palace took payments without declaring them. The Inland Revenue, which declined to comment on reports that it had been invited to the palace for a meeting, said it could not disclose personal tax records. A spokeswoman said: "Tax records are disclosed to no one ... [except in] a court case."

The British Bankers' Association said it could only release account records by court order, in the interests of national security or at a client's request.

Dennis Skinner, the veteran left-wing MP, said: "Sir Michael Peat works for the palace, he is paid by the palace, he was knighted by the palace, and it is a racing certainty that he will find for the palace."