No 10 fails to deny Scarlett's influence on survey group

The Government refused yesterday to deny an authoritative report that John Scarlett, the former head of the Joint Intelligence Committee (JIC), asked the Iraq Survey Group (ISG) to include 10 "golden nuggets" in its report on weapons of mass destruction, including a claim that it had smallpox weapons or was trying to produce them.

Mr Scarlett is also said to have suggested to the ISG they include a claim that Iraq probably possessed mobile biological weapons laboratories, and that Saddam Hussein was developing a "rail gun" which could propel an object at enormous speed along a track.

But the Prime Minister's official spokesman insisted Mr Scarlett, the new head of MI6, did not "mislead" Britain over an e-mail suggesting the "golden nuggets" be put in a report by the US-backed investigation.

A Number 10 spokeswoman said: "There's no question of the Government or any of its departments or agencies, and that includes the JIC and its then chairman John Scarlett, seeking to mislead the ISG." The allegations were made by Tom Mangold, a respected journalist and friend of the family of Dr David Kelly, the weapons expert whose suicide was investigated by the Hutton inquiry. That report cleared the Government of "sexing up" the Iraq dossiers against the wishes of the intelligence services.

The revelation that Mr Scarlett tried to influence the ISG yesterday brought fresh calls for him to step down from his new post as "C", the head of Britain's intelligence services, which he took up officially on Sunday. Sir Menzies Campbell, the Liberal Democrat foreign affairs spokesman, has for the first time joined Tory and Labour MPs yesterday in calling for the resignation of Mr Scarlett.

The MI6 chief was criticised in the Butler inquiry on the flawed intelligence on Iraq for allowing the dossiers to be published with the JIC's authority. There was criticism in the Commons of Tony Blair for promoting Mr Scarlett in spite of the intelligence failures. MPs claimed it was a reward for the JIC's approval of the dossiers.

Sir Menzies said on BBC radio: "I find it very difficult to see how Mr Scarlett can command the necessary public confidence. I'm not one of those who make ritual calls for resignations but I've come to the view that, so controversial now is Mr Scarlett, the necessary element of public confidence will be lacking."

The MP for Fife North East also called for a House of Commons select committee to scrutinise the workings of British intelligence. Under the present system, the Prime Minister appoints the members of the existing Commons Intelligence and Security Committee. "I think we should be much more open with these issues," Sir Menzies said.

The head of the ISG, David Kay, appalled the White House and Downing Street when he resigned in January, saying there were no WMD in Iraq. The Scarlett e-mail was sent to Mr Kay's replacement, Charles Duelfer on 8 March, this year. The ISG has yet to deliver its definitive report, although Mr Blair has now admitted that WMD may not be found in Iraq.