The row

LIZ MACKEAN:
At 6.07pm, on May 29th, Andrew Gilligan made a broadcast that was live and unscripted.

ANDREW GILLIGAN:
(29th May 2003)
What we have been told by one of the senior officials in charge of drawing up that dossier, that, erm, actually the government probably knew that the 45 minute figure was wrong, even before they decided to put it in.

MACKEAN:
This central allegation was not repeated. But for the Government, the damage was done. The Prime Minister told Lord Hutton that if true, the allegations would have merited his resignation. He said the story was given booster rockets by a Mail On Sunday article in which Andrew Gilligan named and blamed Alastair Campbell.

If the row exploded on May 29th, the fuse was lit two months previously when Britain went to war on Iraq. The BBC's reporting inspired a torrent of angry letters from Alastair Campbell.

In late June, when the BBC thought the row was ending, he accused the Corporation of bias and lying. The chairman of BBC governors told the inquiry it was an attack that justified the strongest defence. But the nature of that defence has been challenged.

The inquiry has heard it was several weeks before the BBC's director of news checked Andrew Gilligan's notes. Nor had Richard Sambrook been made aware of an e-mail by his editor which criticised his reporting.

Today the Government's counsel questioned the independence of BBC governors.

JONATHAN SUMPTION QC:
(Counsel for the Government)
They were brought under heavy pressure by the chairman to back the executive's line. They were not provided with the information that might have enabled them to take their own line...It was perhaps the last occasion on which somebody within the BBC who was independent of the executives could have brought a fresh eye to the dispute.

MACKEAN:
In the course of the inquiry the BBC has admitted mistakes. But it has defended the original decision to broadcast. Dr Kelly was also the source for two other BBC journalists, including Susan Watts for Newsnight. Their reports were held by the BBC, if not by her, to be broadly corroborative of Andrew Gilligan.

ANDREW CALDECOTT QC:
(Counsel for the BBC)
Each of these three experienced journalists independently judged that Dr Kelly's criticisms should be heard by the public. They did not know them to be true. How could they? The intelligence world is closed and the BBC did not have a key. They therefore did not present them as true, but they did present them as credible.

MACKEAN:
All along the BBC has highlighted a distinction - that between its own view and the view expressed by a source. This is a point Lord Hutton has appeared to challenge. Several times he has asked whether it's a distinction audiences would recognise.

Lord Hutton will have to decide whether Andrew Gilligan accurately reported his meeting with Dr Kelly at this central London hotel. A key question is: Who named Alastair Cambell first? Dr Kelly, or as his friend told the inquiry, Andrew Gilligan.

The Government argued that there was no crusade against the BBC. But extracts from his diary reveal his determination to go for the clear win. In the blunt language for which he is both loved and loathed, the Communications Director said he thought if Dr Kelly was the source it would "f**k Gilligan".

The counsel for the inquiry questioned both sides' sense of proportion.

JAMES DINGEMANS QC:
(Counsel for the Inquiry)
It was perfectly apparent that perspective had been lost. Your Lordship will have to consider whether or not that loss of perspective was restricted to either side.

MACKEAN:
"A game of chicken with the BBC" was how one of the Prime Minister's spokesman described the dispute. The inquiry counsel had wondered - a game of chicken with Dr Kelly in the middle? Lord Hutton must now decide.

This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.