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He began by reminding the packed court room at London's Royal Courts of Justice the inquiry had been prompted by a "very tragic death", and asked all those present to stand for a minute's silence to remember Dr Kelly.
He then outlined the remit of the inquiry, which he said was to examine "quickly and fairly" the circumstances surrounding the death of the government scientist, who worked for the Ministry of Defence.
"It is clearly important that I and the public should have a fuller picture of the facts," he said. "The first task is to flesh out that outline."
Dr Kelly was found dead almost two weeks ago in woods near his Oxfordshire home, with a knife and a packet of painkillers nearby.
Lord Hutton also revealed the body was found with four electrocardiogram pads on his chest. Dr Kelly was known to have a coronary artery disease.
However, Lord Hutton said, the post mortem investigation found he had removed his watch and glasses before he died, suggesting he had committed suicide.
Dr Kelly was at the centre of a major rift between the government and the BBC over claims about Iraq's weapons capability.
He appeared before a committee of MPs investigating the government's reasons for going to war with Iraq just a few days before he died.
He told the committee that he did not believe he was the main source for a BBC report alleging the government had "sexed-up" a dossier on weapons of mass destruction.
But following his death the BBC confirmed the rumours circulating in the media that he was the source.
One of the aims of the Hutton inquiry will be to establish how Dr Kelly's name became public, and what exactly he told journalists.
Lord Hutton said witnesses to the inquiry would include the Prime Minister, Tony Blair, his press spokesman, Alastair Campbell, and the Defence Secretary, Geoff Hoon.
He will also call the chairman of the BBC, Gavyn Davies, and the BBC journalist whose controversial report began the row, Andrew Gilligan.
Mr Blair, who appointed Lord Hutton to head the inquiry, has already said he will cooperate fully, as has the BBC.
Hearings for the Hutton inquiry began on 11 August.
Lord Hutton heard evidence from 74 witnesses over six weeks and viewed thousands of pages of evidence.
The report was published on 28 January 2004 and was highly critical of BBC governors for failing to investigate properly Downing Street's complaints.
As a result, the BBC chairman Gavyn Davies, the corporation's Director General Greg Dyke and journalist Andrew Gilligan resigned.
Lord Hutton absolved the government of any kind of "dishonourable, underhand or duplicitous strategy" in the leaking of Dr Kelly's name to the press.
But he said the Ministry of Defence was "at fault" for failing to tell Dr Kelly that his identity as the suspected source would be confirmed to journalists who suggested it.
He said Mr Gilligan's report that the Iraq dossier was sexed up was "unfounded" and that Joint Intelligence Committee chairman John Scarlett had acted to ensure the dossier was consistent with reliable intelligence.
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