Thatcher refuses to attend Pergau inquiry

BARONESS Thatcher has refused to give evidence to the Foreign Affairs Select Committee inquiry into the Pergau dam affair.

In a letter to the committee yesterday, the former prime minister declined the invitation to answer questions. 'I do not feel able to break the convention, established since 1945, that prime ministers and former prime ministers do not give evidence to select committees on specific issues,' she wrote.

Her reaction infuriated committee members. Dennis Canavan, the MP for Falkirk West, said: 'Thatcher has chickened out.' He said he was 'more convinced than ever that she was deeply involved in the Pergau fiasco and is now involved in the cover-up'.

Lady Thatcher was regarded as the most crucial witness on the committee's list. As prime minister, she oversaw a dramatic thawing in diplomatic relations with Malaysia, culminating in the sale of arms and state aid, most notably for Pergau.

MPs are examining whether the pounds 234m spent on Pergau was conditional on the sale of weapons - something that is contrary to Whitehall rules and possibly illegal.

Thanks to a mistake by Lord Younger, the former secretary of state for defence, during a trade mission to Malaysia in March 1988, the two were originally tied - and later frantically disentangled by embarrassed ministers and officials.

But earlier this week, the Independent revealed how, while she was writing formally to unscramble the link, Lady Thatcher decided to hold a secret meeting with Dr Mahathir Mohamad, the

Malaysian prime minister.

On 6 August 1988, on a visit to Australia, she stopped in Kuala Lumpur and spent two hours with Dr Mahathir. According to a parliamentary answer, they discussed arms, aid and air rights for the Malaysians at Heathrow.

A month later, they signed a memorandum of understanding covering the purchase of pounds 1bn of arms from Britain. In March 1989, in a meeting with Dr Mahathir in London, Lady Thatcher offered aid for the Pergau dam.

Her non-appearance before the committee contrasts with the recent evidence of Lord Callaghan, a fellow former prime minister, to the Treasury and Civil Service Committee. 'I am given to understand that this was on the general topic of the role of the Civil Service and not on a specific issue,' Lady Thatcher explained in her letter.