Demands grow for inquiry into the case for war as Hutton is accused of a 'whitewash'

The BBC chairman Gavyn Davies became the first casualty of the inquiry into the death of Dr David Kelly as Lord Hutton was accused last night of presiding over a "whitewash".

Tony Blair, his former director of communications Alastair Campbell and the Defence Secretary Geoff Hoon were all cleared of any improper behaviour leading up to the suicide of the weapons expert, bringing barely disguised relief in Government circles.

Vindication of Mr Blair allowed him to survive the most testing 24 hours of his premiership, following his wafer-thin victory in Tuesday's Commons vote on tuition fees. The combination of both events could have cost the Prime Minister his job but one jubilant aide said last night: "Houdini has done it again."

However, Lord Hutton failed to settle the crucial question of whether Mr Blair took Britain to war in Iraq on a false prospectus. After he ruled that the intelligence on Iraq's weapons of mass destruction was beyond his terms of reference, the Tories and Liberal Democrats renewed their demands for an independent inquiry into the build-up to war.

The 740-page report sent shockwaves through the BBC. Lord Hutton said that the BBC journalist Andrew Gilligan's allegation that the Government had "sexed up" its dossier on Iraqi weapons and included intelligence it knew to be probably wrong or questionable was "unfounded".

He criticised as "defective" the BBC management system which allowed the reporter to make his claims on Radio 4's Today programme and said the BBC governors should have investigated the Government's complaint about his story more fully.

The BBC board of governors was in a crisis session last night and will meet again today amid speculation that further resignations are on the cards - possibly by all 12 members.

Accepting "ultimate responsibility", Mr Davies said: "I have been brought up to believe that you cannot choose your own referee, and that the referee's decision is final."

But he went on to challenge key elements of Lord Hutton's findings, asking: "Is it clearly possible to reconcile Lord Hutton's bald conclusions on the production of the September 2002 dossier with the balance of evidence that was presented to him during his own inquiry?"

He also asked: "Are his conclusions on restricting the use of unverifiable sources in British journalism based on sound law and, if applied, would they constitute a threat to the freedom of the press in this country?" Mr Davies's comments reflected anger at the BBC at Lord Hutton's surprisingly strong criticism. One BBC insider described it as "an old man's report that is simply wrong".

Greg Dyke, the corporation's director general, said: "The BBC does accept that certain key allegations reported by Andrew Gilligan on the Today programme on 29 May last year were wrong and we apologise for them."

Yesterday's damning judgment on the BBC could have far-reaching implications. It is bound to increase pressure for the governors' regulatory role to be handed to Ofcom, the new communications watchdog, following a government review of the BBC charter which is already underway.

Lord Hutton did criticise the Ministry of Defence for not warning Dr Kelly that his name would become public. But the rebuke was not enough to threaten the position of Mr Hoon, who had been widely seen as the most likely casualty of the inquiry. However, he may move to another post in a cabinet reshuffle shortly.

Lord Hutton surprised many MPs by finding the Government did "not behave in a dishonourable, underhand or duplicitous way" in confirming Dr Kelly's name to reporters who suggested it to the MoD press office after the Government announced that a civil servant had come forward who might be Mr Gilligan's source.

Austin Mitchell, the Labour MP for Great Grimsby, said: "It is a whitewash, basically. The danger is that it is so one-sided a report that it is going to lose credibility. People just aren't going to believe it."

Michael Portillo, the Tory former defence secretary, said: "Certainly I don't think No 10 could be more satisfied if Alastair Campbell had written it - it's very satisfactory from No 10's point of view."

Mr Campbell, who left Downing Street last September, said: "What the report shows very clearly is this: the Prime Minister told the truth, the Government told the truth, I told the truth. The BBC, from the chairman and director general down, did not. Today the stain on the integrity of the Prime Minister and the Government has been removed."

A confident Mr Blair was cheered by Labour MPs after Lord Hutton's findings enabled him to win his Commons joust with Michael Howard. Welcoming the report, the Prime Minister said Lord Hutton had found no evidence to support "a charge of deception, of duplicity, of deceit". He said: "The allegation that I or anyone else lied to this House or deliberately misled the country by falsifying intelligence on weapons of mass destruction is itself the real lie. And I simply ask that those who made it and those who have repeated it over all these months now withdraw it, fully, openly and clearly."

Mr Howard, who was booed by Labour MPs, accepted Lord Hutton's conclusions but refused to apologise to Mr Blair. He said: "Isn't there the starkest contrast between David Kelly - the dedicated scientist and weapons inspector who had done so much for our country - and the cabal of ministers and advisers who were so obsessed with their war with the BBC that they gave scant attention to his welfare?"

Charles Kennedy, the Liberal Democrat leader, said: "The report leaves big questions unanswered, because inevitably they were not addressed. We are still no closer to determining whether this country went to war on a false prospectus. We need an independent inquiry to find out why that happened."

On Dr Kelly himself, Lord Hutton said the government scientist broke civil service rules by his unauthorised meeting with Mr Gilligan and said he was "not an easy man to help or to whom to give advice".

But a statement issued on behalf of Dr Kelly's family said: "If their personal tragedy is not to be compounded, they urge that, regardless of any criticism or exoneration in the report, the Government takes action to ensure that the ordeal suffered by David Kelly will never be repeated. No other person should have to suffer the pressure that he experienced."

In a final submission to Lord Hutton, published last night, the Kelly family said: "The Government made a conscious decision to cause Dr Kelly's identity to be revealed and it did so in order to assist it in the battle with the BBC." The family seized on Mr Campbell's diaries as evidence of the Government's "improper" intent. In one extract disclosed to the inquiry, Mr Campbell wrote: "The biggest thing needed was the source out."