The Lib Dems have explained the decision not to take part in an inquiry into pre-war intelligence on Iraq's weapons, saying it "had not been easy".
The intelligence used to send troops to Iraq is under scrutiny
Foreign affairs spokesman Sir Menzies Campbell said they were boycotting the probe because its remit was limited to intelligence and Iraq's weapons.
It was a "matter of profound regret" it did not include the political decision to go to war, he told MPs.
Jack Straw said "wiser counsel" in the party would come to regret the move.
In a statement to the House of Commons, the foreign secretary said former cabinet secretary Lord Butler will chair the six-member committee looking at whether the pre-war intelligence was right or wrong.
Shadow foreign secretary Michael Ancram welcomed the decision, but this was greeted with "scepticism" by Sir Menzies.
He reminded the Tories that before the war they had claimed military action was the only way of dealing with Saddam Hussein.
Sir Menzies said the Lib Dems objected to the fact the inquiry would not cover the workings of government or deal with the decision-making based on intelligence.
Satisfying the public
"Don't you understand ... that following the public response to the Hutton report that an inquiry that excludes politicians from scrutiny is unlikely to command public confidence," he asked.
"We have never doubted the prime minister's sincerity in these matters, but shouldn't the prime minister and others, in the special circumstances of this case, be willing to submit to scrutiny of their competence and judgement in the discharge of their responsibility?"
Sir Menzies asked why the probe could not have the same breadth as the Franks Inquiry into the 1982 Falklands war.
To laughter, he said: "The government has performed a welcome volte-face on the principle of an inquiry of which we must give George Bush some small credit.
Campbell: Remit of the latest inquiry is 'not broad enough'
"But it is still time to give the inquiry a remit that will truly satisfy the public interest.
"The government should take that opportunity."
Mr Straw said he suspected the Lib Dems decision was one "which the wiser counsel inside the party will come greatly to regret".
"The question of whether intelligence was mishandled in terms of propriety and dishonest - that's been dealt with comprehensively by Lord Hutton," he insisted.
Mr Straw said the terms of reference of the Franks inquiry had stopped at the Argentinean invasion of the Falkland Islands and did not include the decision by the UK to take military action.
"That was properly a decision for the government of the day and the House of Commons," he added.