Stalemate between BBC and Downing Street after MPs clear Campbell on sexing up dossier

Downing Street and the BBC reached a stalemate last night in their furious dispute over whether the Government "sexed up" a dossier on Iraqi weapons, after an inquiry by MPs gave both sides some ammunition.

No 10 claimed victory after the Foreign Affairs Select Committee cleared Alastair Campbell, Tony Blair's director of communications and strategy, of beefing up the intelligence material about the threat from Saddam Hussein's weapons of mass destruction.

The Government demanded the BBC "set the record straight" by admitting that the report that sparked the row was wrong. But the BBC refused to back down, saying the MPs' findings justified the report by Andrew Gilligan, the defence correspondent for BBC Radio 4's Today programme, who claimed in May that intelligence officials were unhappy that a claim Iraq could deploy its weapons within 45 minutes was added to the dossier at a late stage.

Jack Straw, the Foreign Secretary, called for an immediate apology from the BBC in the light of the committee's report. He said: "Not a single committee member, having heard all the evidence both publicly and privately, has found that the BBC's central and damaging allegation was true."

Later, Downing Street softened its tone in an attempt to resolve the dispute. It backed away from criticism that the BBC had pursued an anti-war agenda before and during the Iraq conflict. Mr Blair's official spokesman insisted that No 10 had never seen the argument as a "battle" or "vendetta" and said much of the BBC's journalism was excellent.

In a statement, Mr Campbell did not repeat Mr Straw's demand for an apology. He said: "I am very pleased the Foreign Affairs Committee has found the allegations made against me by the BBC are untrue. These allegations were that I was responsible for the insertion of the 45-minute intelligence into the WMD dossier, against the wishes of the intelligence agencies, whilst probably knowing it to be wrong."

Reflecting Downing Street's more emollient tone, he added: "I want to make it clear yet again that I fully respect the independence of the BBC. There can be a dispute between us as to whether they should ever have run the original story. But surely there can be no dispute that the allegations, whether or not sourced, are untrue. Even now, all I ask is that the BBC accept this."

Mr Campbell said he was saddened that despite "overwhelming evidence" the BBC still refused to admit the allegations it broadcast were false.

Despite No 10's more conciliatory tone, the BBC stuck to its guns, insisting that the committee's verdict showed that its report was justified "in the public interest".

The corporation said in a statement: "It is because of BBC journalism that the problems surrounding the 45-minute claim have come to light and been given proper public attention."

Richard Sambrook, the BBC's director of news, said the committee was "deeply divided" over Mr Campbell's role in compiling the dossier issued last September.

He said: "The committee's report clearly says there are big questions to be asked about the provenance of that claim. It asks questions of the Government and also makes comments about the assertiveness of the language of the September dossier."

With the two sides deadlocked, Downing Street said: "The ball is now in the BBC's court." It urged executives at the BBC to reflect more fully on the MPs' verdict. But there was no sign that No 10 would prolong the dispute by making an official protest under the BBC's complaints procedure, an option it has raised in recent weeks. The view at Westminster last night was that the camps had slugged themselves into the ground.

Downing Street and the BBC "cherry picked" the sections of the report that suited their version of events. No 10 said that no member of the Commons committee believed that the BBC's original allegation against Mr Campbell was true. In turn, the BBC pointed out that the MPs had expressed concern that the language used in the September dossier was more assertive than that traditionally used in intelligence documents.

ANDREW GILLIGAN, BBC CORRESPONDENT 29 MAY

We've been told by one of the senior officials in charge of drawing up that dossier... that ...the Government probably knew that that 45 minute figure was wrong... Downing Street, our source says, ordered a week before publication, ordered it to be sexed up, to be made more exciting and, and ordered more facts to be discovered.

GAVYN DAVIES, BBC CHAIRMAN 6 JULY

"The Governors ...are wholly satisfied that BBC journalists and their managers sought to maintain impartiality and accuracy during this episode."

ALASTAIR CAMPBELL 25 JUNE

"We the Government... deserve an apology about this story ... when you put in the Prime Minister, the Foreign Secretary... saying... this story is not true and the BBC defence correspondent on the basis of a single anonymous source continues to say that it is true, then I think something has gone very wrong with BBC journalism."

DOWNING STREET 6 JULY

"When the full facts of this are set out, any ...reasonable person will see that they are proved to be false. We are saddened that the BBC continues to defend the indefensible."