We've had Butler and Hutton. Now for an Iraq inquiry that really sheds light

This is the year of the Iraq war inquiry. At least, I have the audacity to hope so. With luck, some time this spring the government will announce a full-scale independent review of the way the decision was made to invade and occupy a major Arab country, a policy that has had a bigger impact on Britain's international standing and domestic security than any other military move since the second world war.

Until now, the government has claimed it would not be right to hold an inquiry as long as British troops were in Iraq. The argument was specious, but now that we know that all except 400 troops will be withdrawn by 31 July it loses any force. The prime minister recently sought to convey an image of normality by saying that the duty of the remaining contingent will be to train Iraqi troops on the same basis as British troops do in other countries. That being so, he can hardly go on arguing that combat necessities or the safety of the 400 stay-behinds make an inquiry inappropriate.

The key issue now is to ensure that an inquiry has comprehensive terms of reference, calls the right people, asks relevant questions, and does so in the proper context. Satisfaction at finally getting an inquiry should not swamp the need for vigilance in preventing the government from trying to pre-cook its outcome.

The first priority is that the inquiry should work in public. The team led by Lord Franks, a former academic and diplomat, that looked into the Falklands war is often pointed to as an example; David Cameron raised this analogy last month. But the world of 1983 is not the same as 2009. In the name of national security, Franks took evidence in private. Only his conclusions were published. In those years, hard though it is to believe, Britain's obsession with secrecy and Whitehall traditions of self-censorship were so heightened that any public reference to the UK's intelligence apparatus was routinely excluded. The Franks report broke ground merely by mentioning in an annexe that the government had a Joint Intelligence Committee which assessed foreign events.

Time has moved on. We have already had the Hutton and Butler inquiries into the allegations of Iraq's weapons of mass destruction. The Hutton inquiry took evidence - from, among others, the then prime minister - in public. Butler examined intelligence gathering and sat in private. The new inquiry would look at policy advice and the way it was generated and used. It would be a step backwards if such an inquiry were private and therefore open to manipulation. In 1983, after Franks probe was launched, suspicions arose that Foreign Office officials tampered with the files so as to present a better case against charges of incompetence and poor judgment. Without openness, the public has little chance of assessing the evidence of witnesses. Rather than reinforce confidence, secret inquiries undermine it.

A new Iraq inquiry need not review WMD again. The failures of political intelligence that led ministers to think an invading army would be welcomed, especially if it stayed on indefinitely to try to rule a proudly nationalist population, were as significant as the much-reported failures of military intelligence. So an inquiry's terms of reference must not only cover the political advice the government received before the invasion. It must also look at cabinet discussions and the options given to ministers after Saddam Hussein was toppled - particularly in the first year during the period of the so-called Coalition Provisional Authority.

The stupidity of disbanding the Iraqi army and sacking Baghdad's senior corps of civilian administrators on the grounds that they were all enthusiastic Saddamists is widely recognised. But the invaders' mistake was more fundamental. They apparently failed to understand that occupying the country indefinitely rather than immediately handing power to Iraqis or to an impartial UN caretaker administration would lead to resistance from Iraqi patriots as well as foreign jihadis. An inquiry must discover whether the Foreign Office's Arabists and other officials were asked to tell the government if resistance would mount under an occupation, even if the invasion itself was quick and effective.

Interviews I did with several senior officials in 2007 suggest that they gave few such warnings. One reason is a changing Whitehall culture in which officials are increasingly unwilling to challenge ministers' initial instincts or prepare a wide range of options for decision. Another is the "sofa government" style imposed by Tony Blair, which limits cabinet discussion and reduces expert advice. The Iraq war inquiry should examine these issues.

Britain's post-invasion policies must also be looked into. To say, as some ministers and officials do, that the Americans were in overall charge of Iraq is not an excuse. An inquiry must discover whether doubts were passed to Washington, and at what level. Did the cabinet consider withdrawing from the occupation (as many other coalition partners did) if they were unhappy about US policy after Saddam was toppled? Loyalty to an ally does not require giving it a blank cheque and ignoring Britain's national interests.

In Basra, where Britain was the dominant foreign military power, Blair's self-imposed mission was accomplished by early 2005. An election took place in January with minimal violence, and parties representing the various Shia factions, each with their own militias, took control of the city through the ballot box. That month senior members of Britain's three main parties - Robin Cook, Douglas Hurd, and Menzies Campbell - issued a joint appeal to Blair to withdraw all UK troops by the year's end. "There can be no credible programme to reduce support for the resistance unless we convince the Iraqi people that we have an exit strategy within a realistic timeframe," they said. Yet, three years on, another 80 British troops have lost their lives in Iraq, as the militias increasingly targeted British forces. Britain was powerless to intervene in intra-Shia rivalries, and when the Sadrists withdrew from Basra's streets last spring during an Iraqi government operation known as Charge of the Knights, it was largely under Iranian pressure for a ceasefire.

An inquiry into the way British policy was made before the invasion and during the occupation will embarrass the government, even though its main architect resigned in 2007. This may prompt Gordon Brown to continue resisting one. But it will also put the Conservatives on the spot for going along with the war without major challenge. That makes an inquiry less difficult politically, as well as highlighting the Conservatives' courage in calling for one. The Liberal Democrats, who opposed the invasion and repeatedly demanded an early withdrawal, are right in focusing on the need for the inquiry to be public. Their point is crucial. Otherwise, an inquiry risks being a whitewash.

The updated version of Jonathan Steele's book Defeat: Why They Lost Iraq is published in paperback this month.

Jonathan Steele