Britain's top spymaster has decided to retire early, dealing a damaging new blow to the Government's credibility over its presentation of intelligence on Iraq.
Sir Richard Dearlove, the head of MI6, is thought to be dismayed by the visible rift between his organisation and Downing Street.
At 58, he had been widely expected to stay in post for another two years, but is now likely to have left by early next year, a little more than four years after he started the job in September 1999.
The move is likely to worsen MI6's crisis of confidence over Downing Street's alleged manipulation of information over Saddam Hussein's weapons of mass destruction, and to plunge the Prime Minister and the intelligence services into a covert battle over the choice of Dearlove's successor.
Retired and serving MI6 officers have told The Observer that they favour an internal candidate - someone who would be seen as a standard-bearer for the freedom from political interference the service has traditionally sworn to uphold.
But Whitehall sources say Tony Blair is seriously considering John Scarlett, the chairman of the Joint Intelligence Committee - viewed by some professionals as 'fatally tainted' because he endorsed the claim in the Government's dossier last September that Saddam could deploy chemical or biological weapons within 45 minutes.
Scarlett was a trusted member of Blair's inner circle throughout the Iraq crisis, and has now become a personal friend.
He is to give evidence to Lord Hutton's judicial inquiry into the death of the Ministry of Defence biological weapons expert Dr David Kelly, who is said to have questioned the 45-minute assertion in his briefings to BBC journalists.
'Scarlett put his name to the dossier which included the 45-minute claim, and Blair has repeatedly cited his support in telling people it had the intelligence services' backing,' one source told The Observer. 'It is now uncomfortably apparent that this claim was exaggerated. He is going to be placed in a very difficult position.'
Dearlove last month effectively named his own choice as his successor in the job of MI6's 'C' by appointing a deputy. The post of MI6 deputy chief is normally left vacant, and is filled only when the serving 'C' has announced his departure and wants to groom his successor.
The identity of the new deputy is known to The Observer, but we are not publishing it because he remains undercover. Equally respected for his intellect and operational skill, he has served as a spy in Asia and South America. More recently, he led MI6's attempts to gather intelligence on Iraq. He and his colleagues are said not to dispute the main substance of the Government's September dossier, only its presentation and emphasis. Sources say that they remain confident that overwhelming evidence of Iraq's weapons of mass destruction programmes will in due course emerge.
Meanwhile Dearlove, a graduate of Queen's College, Cambridge, has told friends that after retirement he would like to be considered for a job as Master of an Oxbridge college.
Widely admired for his swift and decisive response to the terrorist attacks on America on 11 September, 2001, Dearlove restructured MI6 to focus on Islamist extremism, and began a big recruiting drive for more Arabic speakers and Muslims. But while he was close to Blair in the period after the attacks, accompanying him on trips to build support for the anti-terrorist coalition, there were signs that, once the Government began to concentrate mainly on Iraq, his influence had waned.
He was rarely seen in Blair's company, and his presence on diplomatic missions ceased. In the index to a recent book by former Times editor Peter Stothard, who was granted constant fly-on-the-wall access to Blair during the Iraq crisis, Dearlove's name does not appear. There are, however, numerous references to Scarlett.
Scarlett is a former MI6 man who served there with distinction, leading the operation which saved the life of MI6's agent inside the Soviet KGB, Oleg Gordievsky. But intelligence sources are scathing about his association with Blair's media adviser, Alastair Campbell, who has described him as a 'mate', and by his public endorsement of the September dossier.
The fiercest criticism relates to the fact that Scarlett allowed Campbell, a political appointee with no intelligence training or expertise, to chair a meeting which discussed the dossier and the raw intelligence behind it before publication.
This is being seen within the intelligence community as a historic breach of long-established constitutional principles. A retired senior officer said: 'Rather than allow that to happen, Scarlett should have resigned.'
The Commons Select Committee on Foreign Affairs has already condemned Campbell's chairing of the 9 September meeting, saying: 'It was wrong for Alastair Campbell or any other special adviser to have chaired a meeting on an intelligence matter, and we recommend that this practice cease.'
Reports last week said MI6 was warned explicitly by the CIA that it would not be wise to publish the 45-minute claim.
Appointing Scarlett, a close friend of Washington ambassador Sir David Manning and Sir Jeremy Greenstock, Britain's ambassador to the UN, would be another breach of precedent, but the job of 'C' is entirely within the Prime Minister's gift.
Sir Richard Dearlove, the head of MI6, is thought to be dismayed by the visible rift between his organisation and Downing Street.
At 58, he had been widely expected to stay in post for another two years, but is now likely to have left by early next year, a little more than four years after he started the job in September 1999.
The move is likely to worsen MI6's crisis of confidence over Downing Street's alleged manipulation of information over Saddam Hussein's weapons of mass destruction, and to plunge the Prime Minister and the intelligence services into a covert battle over the choice of Dearlove's successor.
Retired and serving MI6 officers have told The Observer that they favour an internal candidate - someone who would be seen as a standard-bearer for the freedom from political interference the service has traditionally sworn to uphold.
But Whitehall sources say Tony Blair is seriously considering John Scarlett, the chairman of the Joint Intelligence Committee - viewed by some professionals as 'fatally tainted' because he endorsed the claim in the Government's dossier last September that Saddam could deploy chemical or biological weapons within 45 minutes.
Scarlett was a trusted member of Blair's inner circle throughout the Iraq crisis, and has now become a personal friend.
He is to give evidence to Lord Hutton's judicial inquiry into the death of the Ministry of Defence biological weapons expert Dr David Kelly, who is said to have questioned the 45-minute assertion in his briefings to BBC journalists.
'Scarlett put his name to the dossier which included the 45-minute claim, and Blair has repeatedly cited his support in telling people it had the intelligence services' backing,' one source told The Observer. 'It is now uncomfortably apparent that this claim was exaggerated. He is going to be placed in a very difficult position.'
Dearlove last month effectively named his own choice as his successor in the job of MI6's 'C' by appointing a deputy. The post of MI6 deputy chief is normally left vacant, and is filled only when the serving 'C' has announced his departure and wants to groom his successor.
The identity of the new deputy is known to The Observer, but we are not publishing it because he remains undercover. Equally respected for his intellect and operational skill, he has served as a spy in Asia and South America. More recently, he led MI6's attempts to gather intelligence on Iraq. He and his colleagues are said not to dispute the main substance of the Government's September dossier, only its presentation and emphasis. Sources say that they remain confident that overwhelming evidence of Iraq's weapons of mass destruction programmes will in due course emerge.
Meanwhile Dearlove, a graduate of Queen's College, Cambridge, has told friends that after retirement he would like to be considered for a job as Master of an Oxbridge college.
Widely admired for his swift and decisive response to the terrorist attacks on America on 11 September, 2001, Dearlove restructured MI6 to focus on Islamist extremism, and began a big recruiting drive for more Arabic speakers and Muslims. But while he was close to Blair in the period after the attacks, accompanying him on trips to build support for the anti-terrorist coalition, there were signs that, once the Government began to concentrate mainly on Iraq, his influence had waned.
He was rarely seen in Blair's company, and his presence on diplomatic missions ceased. In the index to a recent book by former Times editor Peter Stothard, who was granted constant fly-on-the-wall access to Blair during the Iraq crisis, Dearlove's name does not appear. There are, however, numerous references to Scarlett.
Scarlett is a former MI6 man who served there with distinction, leading the operation which saved the life of MI6's agent inside the Soviet KGB, Oleg Gordievsky. But intelligence sources are scathing about his association with Blair's media adviser, Alastair Campbell, who has described him as a 'mate', and by his public endorsement of the September dossier.
The fiercest criticism relates to the fact that Scarlett allowed Campbell, a political appointee with no intelligence training or expertise, to chair a meeting which discussed the dossier and the raw intelligence behind it before publication.
This is being seen within the intelligence community as a historic breach of long-established constitutional principles. A retired senior officer said: 'Rather than allow that to happen, Scarlett should have resigned.'
The Commons Select Committee on Foreign Affairs has already condemned Campbell's chairing of the 9 September meeting, saying: 'It was wrong for Alastair Campbell or any other special adviser to have chaired a meeting on an intelligence matter, and we recommend that this practice cease.'
Reports last week said MI6 was warned explicitly by the CIA that it would not be wise to publish the 45-minute claim.
Appointing Scarlett, a close friend of Washington ambassador Sir David Manning and Sir Jeremy Greenstock, Britain's ambassador to the UN, would be another breach of precedent, but the job of 'C' is entirely within the Prime Minister's gift.
