Secret letters reveal how a deal to bring MI5 man back to UK collapsed

CONFIDENTIAL letters between Government lawyers and Liberty, the civil rights group, reveal how tortuous negotiations to bring David Shayler back to the UK broke down.

John Wadham, director of Liberty and Mr Shayler's legal representative, had tried to set up an agreement with Roland Phillips, the Treasury Solicitor, who was acting for John Morris, the Attorney General. Mr Shayler wanted an agreement that guaranteed him some sort of immunity from prosecution if he returned to Britain.

Last December, Mr Wadham wrote to Mr Phillips expressing his concern that a proposed agreement did not include an amnesty: ``I should make it clear that the absence of a clearer indication from the Government that Mr Shayler is not likely to be prosecuted if he returns to the United Kingdom does cause some concern,'' Mr Wadham wrote.

At that time, a draft arrangement had already been drawn up in a ``heads of agreement'' document and Mr Wadham was trying to clarify the terms under which the government could withdraw its consent over any articles or books written by Mr Shayler.

The Government wanted control over the copyright on Mr Shayler's writing. Mr Wadham proposed that the Government should be able to withhold permission for Mr Shayler's writing only if it ``discloses the operations, sources, methods of the security or intelligence agencies and such disclosure would result in actual damage to national security or the disclosure reveals the identities of staff of the security and intelligence agencies''.

Mr Wadham said that Mr Shayler, a former Sunday Times journalist, wanted to earn a living out of writing and that he could not be expected to be bound by legal restrictions that go beyond the protection of MI5 and MI6 operations and agents.

Mr Wadham also said that Mr Shayler would be happy to return the pounds 40,000 he had already received from the Mail on Sunday for selling his story.

"However, it is necessary to recognise that most of this money has now been spent, and that if he returns to the UK he will need the balance to find accommodation and to live on until he finds other work. Any agreement would have to ensure that the debt could not be enforced for five years,'' Mr Wadham wrote.

Mr Wadham suggested in February that one way of speeding up negotiations would be for Mr Shayler and the Attorney General to meet. ``My client would be happy to arrange a venue in Paris for this,'' he wrote.

Roland Phillips sent a further draft agreement, complete with three draft annexes, to Mr Wadham that month. Mr Phillips emphasised the importance of keeping the negotiations secret: ``I would also mention that I regard it as a condition of our discussion that they [the talks] should be conducted in strict confidence.''

Mr Wadham tried to winkle out a reassurance from Mr Phillips that Annie Machon, Mr Shayler's girlfriend, would not be prosecuted. In a letter at the end of February, Mr Wadham wrote: ``What I can say is that, if Annie Machon is charged, these negotiations will end immediately.''

Once again, Mr Wadham tried to arrange a meeting directly between Mr Shayler and his legal adversaries. ``I have already suggested that one way of building bridges and further trust would be for a member of the Service [MI5] to go to Paris to meet my client.''

Mr Wadham agreed that the negotiations should be kept confidential, but wanted some idea about how the government intended to ``handle the press'' if Mr Shayler returned to Britain.

At this point, Mr Wadham warned that a breakdown in the negotiations would also make the confidentiality clause null and void: ``If no agreement is reached, we reserve the right to publish the details of the negotiations and to use them in subsequent proceedings,'' Mr Wadham wrote.

Further delays occurred in March when Roland Phillips received a bundle of documents from the Mail on Sunday relating to Mr Shayler's story.

The police had told Mr Wadham that they did not intend to arrest Annie Machon if she returned to Britain, but Roland Phillips wrote that this did not affect the circumstances of Mr Shayler whose case is ``entirely separate''.

Nevertheless, Mr Phillips wanted to know more about the book that Ms Machon was supposed to be writing. Mr Wadham told Mr Phillips it was a work of fiction and did not contain anything that should concern him.

Mr Phillips also made it clear that there could - at that point - be no immunity from prosecution for Mr Shayler. Mr Wadham accepted this but wanted the Attorney General to assess the situation. ``Once the decision not to prosecute has been made, real progress on this agreement will be possible.''

Under the terms of the draft agreement, the Attorney General wanted Mr Shayler to cooperate fully with a debriefing by MI5 officers, but Mr Wadham emphasised that he could only do this if Mr Shayler knew that this evidence could not be used against him in court.

Further redrafts of the agreement took place in May. Mr Wadham suggested a clause on the right for Mr Shayler to publish material in the ``public interest'', but Mr Phillips rejected this as ``not likely to be acceptable to my clients. I should also say that it is entirely inappropriate in an agreement of this kind.''

Again the question of prosecution was left open. ``I regret however that the Attorney General is not in a position to reach a conclusion on the issue of prosecution.''

John Morris, the Attorney General, did not, is seems, have all the information required to make that decision then, Mr Phillips wrote.

Once again, Wadham tried to at least get a ``preliminary view'' on the possibility of prosecution before Mr Shayler signed the agreement and returned to Britain.

However, negotiations began to break down in June after reports appeared in the Daily Telegraph and the Spectator that had used information allegedly supplied by Mr Shayler. Mr Phillips wrote a strongly worded letter to Mr Wadham expressing dismay that details of the negotiations had been revealed.

``It was my understanding that the fact of our discussions and their terms were to remain confidential, and I write first of all to repeat my assurance to you that that understanding has not been breached on my side, and secondly to deplore the fact that your client seems to have breached it and has moreover seriously misrepresented the terms of our discussions, to the extent that it will make it more difficult to have any meaningful discussions in the future.''

There is likely to be little by way of discussion now that Mr Shayler is in custody.