The Government: Report will make uncomfortable reading in Downing Street

On the face of it, the criticism in the Butler report is pretty devastating for Tony Blair. Its conclusions - that the intelligence on which he based his case for war in Iraq was "seriously flawed" and his language about it was over the top - did not make for comfortable reading in Downing Street.

Most dangerously, the report highlights why the Prime Minister's trust ratings have plummeted. It was instructive that Downing Street launched an immediate operation to shore up trust in Mr Blair, pointing out the parts of the report that made clear he acted in good faith.

On the other hand, Lord Butler of Brockwell may have done Mr Blair a favour by being critical without questioning his integrity. Yesterday's report cannot be dismissed as a "whitewash" like Lord Hutton's inquiry into the death of David Kelly. That would have been the last thing Mr Blair wanted or needed, and might have inflicted more damage than yesterday's severe rap over the knuckles. The Prime Minister hopes the Butler report will mark an important staging post on the road to "closure" over his decision to take military action in Iraq. In the Commons yesterday, he offered his critics a kind of truce over the war, asking them to accept he was not a "war-monger" and saying he did not regard them as "closet supporters of Saddam".

But the immediate reaction among Labour MPs suggested that closure might be some way off. What left a nasty taste for some was not Lord Butler's diagnosis but the absence of any firm action in regard to the individuals responsible, most notably John Scarlett, the chairman of the Joint Intelligence Committee (JIC).

Mr Blair took full responsibility and offered his most contrite words on Iraq so far. But he did not go as far as some allies had wanted. To achieve catharsis, they wanted him to use the S-word - "sorry".

But "sorry" is a word that is not in the Prime Minister's lexicon when it comes to Iraq.

The "never again" theme that ran through Lord Butler's 196 pages was accepted by Mr Blair. He had no other option. In future, intelligence will not be cherry-picked by politicians. If the Government publishes intelligence material, it will be under its name and not that of the JIC, which took ownership of the September 2002 dossier. The JIC would issue its own version at the same time.

But the Prime Minister stopped short of promising that there would never be another Iraq, as some Labour MPs were hoping to hear. Indeed, he warned that Britain was likely to face similar dilemmas again because of the combined threats of terrorism and weapons of mass destruction. In the short term at least, his own ability to win support for intervention would surely be limited.

The other main lesson in the Butler report involves Mr Blair's informal style of decision-making and his by-passing of the traditional system of Cabinet government. Lord Butler said that while Cabinet ministers were given oral briefings about the intelligence on Iraqi weapons, they did not see the "excellent-quality papers" written by officials. That made it "much more difficult" for ministers "outside the small circle directly involved to bring their political judgement and experience to bear on the major decisions for which the Cabinet as a whole must carry responsibility".

Mr Blair knew long before he launched the Butler inquiry that his style of governing was too informal for his own good. His motives were good. "Call me Tony," Mr Blair instructed his Cabinet at its first meeting. Visitors to his "den" - more a sitting-room, where business was done on a sofa and coffee table, than an office, - were also told to drop the formalities.

But this informal approach encouraged the "command and control" system Mr Blair had favoured in opposition, with the key decisions taken by a coterie of advisers. It might have been necessary before 1997, but it was not suited to government. Cabinet ministers felt they had been left out of the loop and that power resided in a few over-worked hands, such as Alastair Campbell's. Decisions were held up so that people could "ask Alastair". The lack of proper minutes meant that loose ends were not tied up.

The limitations were laid bare during the evidence submitted to the Hutton inquiry - for example, the "running meeting" in the Prime Minister's study, with its shifting cast list, that decided on the strategy under which David Kelly's name became public.

As Mr Campbell's departure from Downing Street became inevitable, Mr Blair resolved that procedures must be tightened up. Since last autumn, he has held far fewer meetings in his "den" and more round the coffin-shaped table in the Cabinet Room, with proper agendas and minutes. His official spokesman insisted that the Defence and Overseas Policy Committee, which did not meet in the run-up to the war, now meets regularly.

Mr Blair was not surprised that Lord Butler honed in on his style of government. As Cabinet Secretary when Labour won power, he was worried about the Blair approach. He even suggested that an official note-taker be present at Mr Blair's regular meetings with Gordon Brown - which often took place in the garden of Downing Street - or that his officials be given a transcript immediately afterwards.

Where does the Butler report leave the Prime Minister? "We think we are approaching closure on the decision to go to war," one close Blair aide said last night.

But "Iraq" is not dead yet: for some people, it is a shorthand for a wider lack of trust in Mr Blair on other issues. A more sceptical Blair ally said: "I don't think he'll get closure until he has won another general election. The question of trust is still hanging in the air."

THE GOVERNMENT PLAYERS

TONY BLAIR

Prime Minister

Tony Blair faces criticism for the language of his statement to MPs in the September before the invasion and for his informal style of government.

The report clears Mr Blair of acting in bad faith but criticises him for describing the dossier on Iraq's WMD as "extensive, detailed and authoritative" when caveats on intelligence had been removed.

The report said Mr Blair may have "reinforced" the idea of fuller and firmer intelligence supporting the dossier.

It criticises Mr Blair's style of government, such as the many meetings of small groups of key ministers, and reforms concentrating decision-making "in fewer minds at the top". It cited briefing papers not being circulated to cabinet members.

ALASTAIR CAMPBELL

Prime Minister's former Director of Communications and Strategy

Mr Campbell warrants just one mention in Lord Butler's report. He submitted written evidence to the inquiry, but did not give oral evidence after Lord Butler decided his role in the affair had already been fully explored by the Hutton inquiry.

However, the Butler inquiry did criticise the decision to publicise the fact that the Joint Intelligence Committee was the author of the dossier. Mr Campbell had written to Mr Scarlett in the days before the document was published that "this must be, and be seen to be, the work of you and your team".

But Lord Butler yesterday said that decision was a "mistake", and "had the result that more weight was placed on the evidence than it could bear."

JONATHAN POWELL

Prime Minister's Chief of Staff

The "informality and circumscribed" way in which crucial decisions on Iraq were made by a clique of Blair advisers was criticised by Lord Butler. He said the relaxed style reduced the "scope for informed collective political judgement".

Mr Powell was only mentioned in passing in the report, but he was central to most of the discussions on the wording of the dossier. E-mails released to the Hutton inquiry revealed him asking John Scarlett, chairman of the Joint Intelligence Committee, for a redraft as its language was "a bit of a problem".

Since the departure of Alastair Campbell, Mr Powell has enjoyed unrivalled access to the Prime Minister.

JACK STRAW

Foreign Secretary

Jack Straw, who played a key role in arguing that Saddam Hussein posed a threat in the run-up to war, was told by his own Foreign Office legal adviser that using force against Iraq would be illegal.

The report confirms ''disagreement" within the Foreign Office about whether another UN resolution would be needed to justify force. Elizabeth Wilmshurst, the Foreign Office deputy legal adviser, did not believe invading Iraq would be legal under international law. She resigned after Mr Straw did not accept her advice. Mr Straw told the inquiry he believed a second UN resolution was ''not essential". He said "the final word would belong to the Attorney General" on whether force was legal.

LORD GOLDSMITH

Attorney General

Lord Goldsmith met members of the Bush administration shortly before advising Downing Street that using force against Iraq would be legal.

He changed his advice that invading Iraq would be legal after the adoption of UN Resolution 1441, which said Iraq was in "material breach" of previous resolutions.

Lord Goldsmith told the Government initially that "there would be no justification for the use of force against Iraq on grounds of self defence against an imminent threat".

Lord Goldsmith is not criticised in the Butler report, which shines the spotlight on Tony Blair over the legality of the war. Lord Goldsmith attached conditions of "hard evidence" to his legal advice.