Now nobody is safe

At the top of government, there is a sense that, after David Kelly's death, anything can happen. Alm

Think back to the scandals, crises and little local difficulties of the past 20 years. Think back to Westland, to Geoffrey Howe's resignation, to the poll tax, to Norman Lamont singing in the bath, to Rolex watches, to Neil Hamilton, to the sexual peccadilloes of John Major and his back-to-basics team, to Lakshmi Mittal, to the Hindujas, to Bernie Ecclestone, and to Jo Moore's burying of bad news. Not one, as a senior Downing Street official reminded me, "actually involved a death". You had to go back to the Profumo affair and the suicide of Stephen Ward for that. There was a chill in his voice. Step back and consider the consequences, not just for Tony Blair and his people, not just for Greg Dyke and his people, but for the political process.

Or this from a cabinet minister, voice quaking, three days after the death of Dr David Kelly: "We feel and act as if we are abused children, hounded and wary of contact with people we fear we can't trust." Abused or abuser? Often one turns into the other. In the case of this government and political journalists, it is hard to tell who first abused whom. Was it the untamed beasts of Fleet Street, with destructive powers built into their DNA? Or was it the much-chronicled spin and manipulation of the new Labour machine? Both have now collided with desperate consequences.

Already, the sheer horror of what happened seems to be dissipating. Within hours of the discovery of Kelly's body, I received a request from a newspaper asking if I would write a piece on "the Prime Minister as war criminal". I politely declined. For all the many mistakes he may have made on the road to war, for all that people around him may have stretched the truth, for all the lack of a big idea to guide them, I have never subscribed to the view that Blair is either mad or bad. If I had, I would be financially better off, with countless more media commissions. That is the culture we inhabit.

Within days, the Westminster village had gone from Alastair Campbell's resignation, to successors to Dyke and Gavyn Davies at the BBC, to a clear-out at the Ministry of Defence starting with Geoff Hoon.

The inquiry by Lord Hutton has already, perhaps inevitably, been reduced to sport. Ringside seats are being reserved. Daily coverage is being planned. If the law lord does his job properly, he might shed light not just on Kelly's death, but on the much bigger question of whether Britain went to war on a false pretext. In Blair's office, they are already preparing for their appearances. Files are being compiled on all aspects of the saga, from the internal minutes of Joint Intelligence Committee meetings with Campbell and others, to contacts with the BBC and other media, to the events that followed Andrew Gilligan's story, Kelly's decision to volunteer himself to the MoD as the possible source, and the circumstance of his death. "We are not operating from a standing start," says one official. The BBC is also marshalling its forces. Both sides are hiring teams of lawyers - at the taxpayers' expense.

The shock and horror of the events are compounded by mystery. Friends of Kelly find it hard to believe that he did actually kill himself. Just before he took his walk in the woods, he is said to have finished an assignment on his computer for the Foreign Office and sent a series of e-mails. In one, he spoke of "many dark actors playing games" but this, I am told, was a phrase he had used several times, and suggested rivalry among his colleagues rather than sinister notions. Kelly had been angry at his treatment from the foreign affairs select committee on 15 July, but is said to have felt more sanguine after appearing before the separate inquiry of the intelligence and security committee the next day. He was looking forward to going back to Iraq to help the government in the desperately important job of finding those elusive weapons of mass destruction. "There lies the terrible irony of the situation. Kelly was the person best able to help No 10 in finding them," says one government official.

Another member of the cabinet expressed confidence - a confidence that now seems to exceed Blair's - that WMDs will still be found. "They must be out there somewhere. We must hold our nerve. The Iraq Survey Group holds the key. It must find the stuff, or at least it must comprehensively account for it."

That faith - remarkable, given that there is no longer any political capital to be gained by expressing it - is based on an assumption that eventually Iraqi scientists and former members of Saddam Hussein's regime will talk. The hope in government now is that the deaths on 22 July of Saddam's sons Qusay and Uday, after a gun battle with US forces in the northern Iraqi city of Mosul, might help the occupying forces to get to the truth more quickly.

Blair had been hoping that the weapons issue would quietly disappear and be revived only on the discovery of some kind of "evidence". Kelly's death shatters that. Now, as Downing Street ponders reinforcements over the August lull, when news stories have a longer shelf life than usual, the Hutton inquiry will ensure the affair remains in the public eye on a daily basis. "Questions of spin, lies and trust will go right through the summer now. It's a disaster for the government's standing," says one senior adviser.

The alarm of 18 July, when the body was found and Blair was flying across the Pacific, has dissipated. They are now into "process". Still, at the top of government there is a sense that nobody can assume they are safe, that anything can happen. Blair is no longer trying to persuade Campbell to stay, something he has done several times before. Other officials in Downing Street are already contemplating not just changes to personnel, but to structures, to ensure that in any new era the whole issue of spin and presentation will take a lesser role. It was something they promised in 2001, at the start of the second term, but this time there is a sense that they have to deliver. "No matter how angry he felt, and I share that anger, Alastair had a responsibility to be proportionate in his response," says one government adviser. And yet Campbell went over his presentation to the foreign affairs select committee with a number of people in Blair's office and the Foreign Office, including Jack Straw. The approach of attack as the best form of defence had been agreed beforehand.

Calls for a period of reflection, an "armistice", after Kelly's death, came to nothing. Both sides are feverishly spinning, planting stories detrimental to the other side - Campbell to his friends, especially in Rupert Murdoch's titles, the BBC to its friends.

At the BBC, managers and journalists are deeply split on the issue. They know they have no choice but to fight their corner, but several wonder whether it might have been done differently. Three weeks ago, I quoted a senior BBC executive as saying the following: "When I was told the name and rank of his source, I realised immediately that we had to defend this with everything we had. This is no junior person with a grudge. This is a senior person who played a role in the dossier."

That suggested to me that the source came from the very top of government, someone who was instrumental in setting policy or determining intelligence: someone like Sir Richard Dearlove, the head of MI6. No matter how eminent a scientist, how versed he was in every last piece of detail of Saddam's chemical and biological weapons, Kelly did not seem to fit that bill.

Some at the BBC wonder whether Dyke fully appreciates the ethos of the public service broadcaster. They fear the government may replace the governors with Ofcom. Changing the licence fee structure is, despite denials, being canvassed in Whitehall.

In government, someone will almost inevitably be sacrificed. There is a sense that Hoon is being "hung out to dry". Both he and Blair have issued blanket denials that they authorised the naming of Kelly or that the scientist was in any way hounded. His name, they say at the Ministry of Defence, would have come out anyway. But what kind of mindset devises a formula in which journalists are encouraged to come up with lists of names, to be pointed in the right direction of the "culprit"? Governments with a greater sense of decorum would not act in that way.

A botched reconstruction of Iraq; no WMD discoveries; opinion polls down; reputation eroded abroad; trust eroded at home; a man dead in an Oxfordshire ditch - the question they are asking as keenly inside government as outside is: "How did we get here?"