Intelligence officers have disclosed that just the day before Mr Blair went to visit president George Bush in April 2002, he appeared to accept this but returned a "changed man" and subsequently ordered the production of dossiers to "find the intelligence" that he wanted to use to justify going to war.
This and other secret evidence (given in camera) to the inquiry will, The Independent on Sundayunderstands, be used as the basis for severe criticism of the former prime minister when the Chilcot report is published.
Mr Blair is said to have "realised" and "understood" that Libya was the real threat and that he knew "it would not be sensible to lead the argument on Saddam and the WMD issue" according to evidence of a conversation on 4 April 2002, the day before he flew to the US to spend a weekend with Mr Bush.
This was disclosed in a closed evidence session with one of MI6's most senior officers, named as SIS4. Although details have been redacted, the transcript, later released online with little fanfare, states that Mr Blair "realised that the WMD threat from Libya was more serious than from Iraq".
During a closed session with former MI6 chief Sir Richard Dearlove, redacted evidence claims Mr Blair "had understood that Libya posed a bigger threat than Iraq, and understood the risk, therefore, of focusing on WMD in relation to Iraq". It refers to a meeting held by Mr Blair at Chequers days before the visit to Mr Bush's ranch in Crawford, Texas, but is unclear whether the claims were made by Sir Richard or another individual. What is clear is that in 2002, British intelligence "discovered that Libya has an active nuclear weapons programme", according to Sir Richard.
By contrast, Iraq had no nuclear weapons and any actual WMD would be "very, very small" and would fit on to the "back of a petrol lorry", according to one senior MI6 officer. They admitted the danger from WMD was "all in the cranium of just a few scientists, who we never did meet and we have been unable to meet ever since".
Yet the weekend at Crawford in April 2002 marked Mr Blair's conversion to Mr Bush's way of thinking. The former US president was determined to deal with Saddam Hussein. On Friday 5 April, Mr Blair and Mr Bush spent the evening alone, without their advisers. By the end of the weekend Mr Blair appeared to be a changed man, where previously he had said "we don't do regime change", according to Admiral Lord Boyce, former Chief of the Defence Staff.
The findings will inform a highly critical attack on Mr Blair when the Chilcot Inquiry publishes its report later this year. "Chilcot has the full story and it's a very complex one," a former senior MI6 officer, who would not be named, told The IoS.
And top-secret British government papers suggesting that the two leaders had made a pact to act against Iraq have been given to the inquiry by barrister and Plaid Cymru MP Elfyn Llwyd. The document was leaked to him after the invasion.
"It was quite clear that the deal had been struck firmly that weekend and the wording was quite unambiguous," he told The IoS. "There's no doubt in my mind that that weekend saw Blair decide to go to war." The former prime minister "had his head turned" and was "star-struck" by Mr Bush, he said.
Before the middle of 2002, "Iraq had been relatively low down the scale of preoccupations" in terms of WMD, according to one MI6 officer in evidence to the inquiry. In the months after Mr Blair's return from Texas, the secret services came under pressure to come up with intelligence to support a move to war.
MI6 was "on the flypaper of WMD", and had no appetite for war, admitted another officer, SIS4. "Those of us who had been around [redacted] knew perfectly well what a disaster for countless people a war was going to be." Another MI6 officer, SIS1, described the "handling" of Curveball, the Iraqi source whose claims of mobile chemical weapons laboratories were subsequently exposed as lies, and the "marketing" of the intelligence as "awful".
The committee is expected to examine why secret warnings from senior Iraqi figures that there were no WMD were dismissed by British intelligence. Iraq "will not be able to indigenously produce a nuclear weapon while sanctions remain in place", stated a report by the Joint Intelligence Committee in March 2002, which admitted there was little or no intelligence on chemical or biological weapons.
After the invasion in March 2003, SIS4 suggested, there was "a sort of recognition that the WMD thing had served its purpose; we had got in, we had done the war".
"This report will be absolutely damning on Blair's style of government, the decision-making process and the planning and execution for its aftermath," said a source close to the inquiry, speaking before the 10th anniversary on Tuesday of the toppling of Saddam Hussein's statue.
One authority on Iraq, Toby Dodge of the International Institute for Strategic Studies, agrees. "I think they will rip into him for his style of government, and that there wasn't due process," he said. "It's clear the way the intelligence was handled, filtered out and shaped was an issue. This is a perversion of the use of intelligence."
A spokesperson for Mr Blair said: "There have been five inquiries into this now. If people do want to see the intelligence reports they are published online. The view that Saddam Hussein had a WMD programme was held not just by the intelligence services in the UK and US but in countries which opposed military action."
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