Controversy over the war will continue

Tony Blair's aides could barely disguise their relief as they looked anxiously through the advance copy of Lord Hutton's report that arrived at Downing Street on Tuesday. They gradually realised that they had no reason to worry.

"We have won 9-1," one close Blair ally whooped with delight, saying the only real criticism was the way the Ministry of Defence failed to tell David Kelly his name was about to become public.

The Prime Minister was said to feel "completely vindicated" by Lord Hutton's conclusions. Aides said he was always confident that he would be cleared, although privately some insiders admitted they would not have dared to believe that yesterday's report could have been so positive.

Blair allies were bracing themselves for allegations that the inquiry had been a "whitewash". They believe there was a gap between media expectations of what Lord Hutton would find and what he was really likely to say. "The media worked itself up into a lather; it recycled its own propaganda and started to believe it," one government source said.

In his Commons statement, a relaxed-looking Mr Blair could not resist firing some bullets at the media as a whole, as well as attacking the BBC over the report which started the Kelly affair. He enjoyed quoting Lord Hutton's statement that "false accusations impugning the integrity of others, including politicians, should not be made by the media".

Alastair Campbell, his former director of communications and strategy, was more blunt. "I hope the media will learn broader lessons from this report than the fact that one story was wrong. I hope it might be a small step towards a more responsible and honest media culture," he said.

There are not many obvious and direct lessons in the Hutton report for the Government. But when the dust settles, and the initial euphoria subsides, Mr Blair and his more sensible advisers will probably reflect that there are lessons from the evidence that emerged during Lord Hutton's inquiry.

Perhaps the most significant concerns the relationship between the Government and the intelligence services. Although Lord Hutton did not directly criticise the dossier on Iraqi weapons, he did say that the Prime Minister's desire to have a strong dossier may have "subconsciously" influenced the Joint Intelligence Committee (JIC) to make the wording stronger than it might have been.

It is difficult to imagine the Government trying to embroil intelligence chiefs in any such exercise in the future. Some ministers admit privately that intelligence chiefs should not be drawn into the propaganda battle. One said yesterday: "In future, we will have to draw a line between propaganda and intelligence."

That will be welcomed by intelligence chiefs. They were thrust reluctantly into the public spotlight, a move symbolised by the unprecedented appearance of the JIC chairman, John Scarlett, as a prominent witness at the Hutton inquiry. "They hated it," said one official who works closely with them. "The message from the intelligence community is clear - never again."

It may not, however, be easy to turn the clock back. Although his findings did not rock the Government, Lord Hutton may have struck a blow for greater openness by drawing the spooks out of the shadows.

The way he conducted the proceedings of his inquiry - with tons of internal government documents and e-mails that would normally have remained secret for at least 30 years published instantly on the inquiry website - was a model for open government and could have long-term implications. It was highly praised by the inquiry into government communications, chaired by Bob Phillis, the chief executive of the Guardian Media Group, which reported last week. MPs hope the inquiry will help to break down the traditional culture of secrecy in Whitehall. The chairmen of Commons select committees will use the Hutton experience to demand access to a much wider range of government documents - including e-mails - when they conduct their inquiries.

The spate of damaging e-mails revealed to the inquiry has already made some officials reluctant to use this method of communication for sensitive messages - although hundreds still wing their way around Whitehall. "We should have learnt the lesson from Jo Moore," admitted one insider, recalling the spin doctor to Stephen Byers who brewed up a storm of controversy by sending an e-mail saying that 11 September 2001 would be a "good day to bury bad news".

The Hutton hearings painted an unflattering portrait of a Blair administration in which most decisions were concentrated in the Prime Minister's inner circle. Officials in Whitehall departments hope the inquiry will force Downing Street to consult much more widely in future.

There are already signs that things are changing in No 10. The evidence given to Hutton lifted the lid on Mr Blair's informal way of working, epitomised by the running meetings held in the Prime Minister's study over two days, which framed the strategy for handling Dr Kelly.

"The culture was too informal," one aide admitted. "That has already started to change. It's all very well being mates but you have got to have proper procedures to make sure decisions are reached and loose ends tied up."

In a letter to the Conservative MP Peter Lilley, Lord Hutton appeared to criticise this approach when he said that official notes of conversations between senior government figures were "very sparse and of no relevance". But he did not make any recommendations about this in his actual report.

Ministers were relieved - but hardly surprised - that Lord Hutton ruled that the accuracy of Britain's intelligence on Iraq's weapons of mass destruction (WMD) was beyond his remit. On the face of it, this is good news for Mr Blair. But it also means that yesterday's report will fail to "draw a line" under the WMD controversy, as the Prime Minister had hoped.

He will continue to resist demands for a proper inquiry into the intelligence on which he based his case for war. But he cannot claim, as Downing Street has done recently, that Lord Hutton has investigated it. The issue will not go away, much as Mr Blair would like it to. The resignation of David Kay as chairman of the Iraq Survey Group has kept it in the spotlight. The presidential election in the United States will help to keep it there.

While Mr Blair could positively welcome the Hutton report, yesterday's events probably marked the end of the honeymoon that Michael Howard has enjoyed since becoming Tory leader last November. He was easily outgunned by the Prime Minister in their much-hyped Commons clash, largely because Lord Hutton had given him so little ammunition.

Mr Howard's pre-emptive strike, suggesting that Mr Blair lied when he told journalists in the Far East that he did not authorise the leaking of Dr Kelly's name, failed to inflict any lasting damage on the Prime Minister. Mr Howard's Commons assault fizzled out, and he cancelled the television and radios interviews he had planned to do afterwards. His decision said it all.