The Hutton Inquiry was not about getting the government off the hook, the Lord Chancellor has told MPs.
The Lord Chancellor speaks up for the independence of inquiries
Lord Falconer said that after the death of Dr David Kelly the public, "needed to see a dispassionate account of what happened given by someone who was completely independent from the government".
Lord Hutton was, "a senior judge of unimpeachable standing" and his name emerged as a "suitable person" to head the inquiry after discussions with senior civil servants.
Lord Falconer was giving evidence to the public administration committee, which is investigating the use of inquiries by government.
The basic aim of inquiries, he said, was "to investigate what's gone wrong and provide recommendations".
The government has been looking at the legislation that regulates inquiries. Many inquiries - such as Lord Hutton's - are run on a non-statutory, ad-hoc basis.
Lord Falconer said non-statutory inquiries could often get the full co-operation of those involved but not always.
Value for money?
The Lord Chancellor said the "vast vast majority" of public inquiries do give value for money.
Referring to the Hutton Inquiry, he said: "at no stage did the cost play a part in the decision to set the inquiry up."
He was questioned about the cost of the Bloody Sunday Inquiry, which is currently running at more than £150 million.
Lord Falconer said: "The judge is mandated to come to a conclusion. It's an independent judicial inquiry."
Asked if the government should be able to intervene to stop an inquiry if costs over-ran, he said that "would almost certainly be wrong".
But he admitted that there was "no formal mechanism" for monitoring whether recommendations made by inquiries have been followed.
Lord Falconer was asked by the committee chairman, Tony Wright, about comments made by the Armed Forces Minister, Adam Ingram, in the Commons on Monday.
Rejecting calls for a public inquiry into the deaths at Deepcut barracks, Mr Ingram said: "We cannot run the Government on the basis of public inquiries. They may be good for lawyers, but they are not for the good governance of this country."
The Lord Chancellor told the committee he agreed that no-one wants the government to be run on the basis of inquiries.
He said, though, that there was a place for public inquiries in cases of "public anxiety", where there was "a need to move policy on", or when people needed to have "a definitive account of what happened".
You can watch the hearing on BBC Parliament on Saturday 26 May a 1800 BST.