By GRAHAM DINESPolitical EditorWHEN the BBC admitted on Sunday morning that dead Government scientist Dr David Kelly was the main source for its claim that Downing Street had "sexed up" the case for war in Iraq, the expression on the Prime Minister's face immediately changed.

By GRAHAM DINES

Political Editor

WHEN the BBC admitted on Sunday morning that dead Government scientist Dr David Kelly was the main source for its claim that Downing Street had "sexed up" the case for war in Iraq, the expression on the Prime Minister's face immediately changed.

He had looked bereft ever since the news broke on Friday that Dr Kelly had apparently cut his wrists in an Oxfordshire wood after his name had been leaked to Labour supporting papers as the man who cast doubt on the Downing Street document that Saddam could launch weapons of mass destruction within 45 minutes.

At a Press conference on Saturday, Mr Blair was even been asked if he had blood on his hands.

However, the BBC's statement seemed to many Government loyalists to put the onus for the appalling outcome of the row between the Corporation and the Downing Street clearly in the BBC's court.

Yesterday, law lord Lord Hutton, who is heading the inquiry into the death of David Kelly, dropped a bombshell. Instead of the narrow base of investigating the death, Lord Hutton insisted: "I make it clear that it will be for me to decide as I think right within my terms of reference the matters which will be the subject of my investigation."

Although it's not part of his remit to look at the political decision to go to war, Lord Hutton, to understand why Dr Kelly died, will have to investigate the two pro-war dossiers compiled by Downing Street – published in September and March – and whether false information was inserted to "sex up" the case for war.

He will also need to find out how Dr Kelly's name came to be leaked – and by whom – to three Labour-friendly newspapers.

Lord Hutton is unlikely to pass judgement on the two critical questions which need answering – was there a clear and present danger to the United Kingdom and its overseas interests from Saddam Hussein's weapons of mass destruction? If not, why did the Government commit British forces to military action?

But he will need to look into whether Downing Street and in particular Alastair Campbell – with or without the direct knowledge of the Prime Minister – exaggerated that threat.

Was Dr Kelly right to blow the whistle on this claim? Who leaked the name of Dr Kelly? Did the pressure piled on Dr Kelly by the Ministry of Defence and the Government machine contribute to his apparent suicide?

The fate of five people depends on the outcome of the Hutton inquiry.

Tony Blair, whose reputation has probably been tarnished forever.

Alastair Campbell, especially if it is proved by the Inquiry that he was responsible for briefing Labour-friendly newspapers that Dr Kelly was the main source for the BBC story

Defence Secretary Geoff Hoon, who has been criticised for doing little to protect Dr Kelly.

The two top men at the BBC, Greg Dyke, the Director-General, and Gavyn Davis, Chairman of the Board of Governors.

Although not a full judicial inquiry under the terms of the 1921 Act with powers to compel witnesses to give evidence under oath – Parliament would have to be recalled to set for that up – Tony Blair has promised that he and his officials will co-operate fully with Lord Hutton.

And clearly, if any evidence was subsequently found to be false, the consequences for the Government and the BBC would be catastrophic.

Mr Blair knows the future of himself and his Government rests on the judge's findings. So much so that he is even prepared to break his Caribbean holiday to present evidence in person.

IRAQ DOSSIER ROW: KEY DATES

May 29: BBC defence correspondent Andrew Gilligan says that a source – a senior British official – informed him that last September's dossier on Iraq was "sexed up" to make a more convincing case for war.

June 1: In a newspaper article, Gilligan claims Tony Blair's director of communications Alastair Campbell, was responsible for adding the claim that Saddam Hussein could launch his weapons of mass destruction within 45 minutes to the dossier.

June 25: Campbell appears before the foreign affairs select committee and denies he was responsible for adding the disputed information to the dossier, demanding an apology from the BBC.

June 27: The BBC rejects call for apology and defends the integrity of the Today report, while Campbell says the BBC has "not a shred of evidence for their lie."

July 7: The committee clears Campbell of "sexing up' the dossier. Campbell repeats his calls for an apology from the BBC, which stands by its story.

July 8: A Ministry of Defence official comes forward and admits meeting Gilligan to discuss the dossier. He denies ever mentioning Campbell.

July 9: Defence Secretary Geoff Hoon writes to BBC chairman Gavyn Davies demanding to know whether the official, named a microbiologist and weapons adviser Dr David Kelly, is the source of the original Iraq dossier story.

July 15: Kelly, summoned before the foreign affairs committee, tells MPs he believes he was not the main "sexed up" dossier source.

July 16: Mr Blair tells MPs the BBC should say whether or not Kelly is the source for its report.

July 17: Gilligan is recalled to a private session of the foreign affairs committee after Kelly denied suggestions he was the possible source of the story.

July 18: Thames Valley Police find Kelly's body. The Ministry of Defence says it will hold an independent judicial inquiry into the circumstances leading up to the scientist's death

July 19: Glenda Jackson MP calls on the Prime Minister to resign over the affair. Mr Blair describes the death as an "absolutely terrible tragedy'.

July 20: The BBC confirms Kelly was the source of claims that the Government "sexed up' intelligence on Iraq. Gilligan issues a statement stating: "I want to make it clear that I did not misquote or misrepresent Dr David Kelly."