TORIES IN TURMOIL / Arms to Iraq: Major takes his turn before the Scott inquiry: As the Prime Minister faces public questioning, fresh revelations threaten his party's unity

JOHN MAJOR today becomes the first Prime Minister to appear before an inquiry in public, when he faces questions on the arms-to-Iraq affair.

The matters at the heart of Lord Justice Scott's investigation have dogged Mr Major's prime ministerial career. The first allegations that the Government knew about exporters' breaches of official guidelines limiting exports to Iraq, and encouraged them, were made just four days after he replaced Margaret (now Baroness) Thatcher at No 10. Critics disagree on whether the appearance will be a welcome or unwelcome distraction from the other problems pressing him.

Among key questions Mr Major faces is what, when Foreign Secretary, he understood the export guidelines to be.

Along with other ministers, he has repeatedly maintained that the Government abided by the guidelines drawn up in 1984. But doubt has been cast upon this by witnesses and documents released to the inquiry. These indicate that the guidelines were secretly relaxed in late 1988 and again shortly before the invasion of Kuwait in 1990.

The Prime Minister says the discrepancies were recognised only after Alan Clark, former trade and defence minister, gave evidence at the 1992 Old Bailey trial of three executives from the Matrix Churchill machine-tool company. Mr Major does not accept Mr Clark's assertion that the guidelines were altered and that parliament and the public were misled by repeated ministerial statements that the guidelines were 'strictly adhered to.'

After the Matrix Churchill trial collapsed, Whitehall sources were quick to reveal that a Cabinet Office investigation found no evidence Mr Major was sent any correspondence during his tenure as Foreign Secretary relating to Iraq, apart from a bid to export Hawk aircraft. He happily volunteers his involvement in the latter as he advised Cabinet colleagues to refuse export licences. The Prime Minister must also account for the way intelligence from MI6, warning of Iraq's intended military use for many British exports, failed to reach those making the decisions.

He will, too, be questioned about his time at the Treasury. In 1988, while he was Chief Secretary, export credits to Iraq increased dramatically. Critics believe much was earmarked for defence sales.

In June 1990, days before Iraq's invasion of Kuwait, Mr Major was invited to a meeting reviewing export controls to Baghdad. Suffering from toothache, he sent his deputy, Richard Ryder, instead. The meeting decided to relax the controls.

At the same time a letter to Customs from the former Secretary of State for Trade, Nicholas Ridley, attempting to limit an investigation into Matrix Churchill, was copied to him. He claims he never saw it, although it was sent to his private secretary.

Mr Major's less-than-comprehensive endorsement of Lord Justice Scott following Lord Howe's attack last week was read as clear recognition of the Government's concern about the inquiry.

Unlike other ministers who have volunteered to resign if they are found to have acted improperly, - the latest being William Waldegrave on ITV's Walden programme yesterday - aides say that there is no question of him resigning. 'He is blameless,' they maintain.

Allegations of government corruption and hypocrisy in supplying defence equipment to President Saddam Hussein have been buried under a pile of more recent accusations. The Scott inquiry team has been patiently excavating it. Lord Howe's protests last week suggested that they were reaching sensitive strata. Mr Major's answers may yet take them to even deeper levels.

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