Kelly was key to resolving arms Iraq dossier row, says spin doctor Campbell
Mr Campbell told the inquiry into the scientist's death that he had believed Dr Kelly could prove a BBC report claiming the Government "sexed up" the dossier was false.
However, he strongly denied he had been responsible for leaking his name to the press.
The inquiry was set up to investigate how weapons expert Dr Kelly apparently came to take his own life after being identified as the source of the report by BBC journalist Andrew Gilligan on May 29.
In his keenly awaited appearance before the Hutton inquiry, Mr Campbell denied he had been responsible for inserting into the dossier a controversial claim that some Iraqi weapons could be deployed within 45 minutes.
He said the dossier had been the work of John Scarlett, chairman of the Joint Intelligence Committee, although he admitted he had advised on "presentational" issues.
Mr Campbell repeatedly spoke of his anger and frustration at the continuing refusal of the BBC to accept its story was wrong.
He said that when Defence Secretary Geoff Hoon told him on July 4 that Dr Kelly had come forward, he thought the scientist could enable them prove the story was untrue.
"I felt that if this person was the source, then it probably was the only way in which we were going to be able to establish the truth, namely that the allegations of May 29 were false," he said.
The inquiry also heard Mr Gilligan had contacted a Liberal Democrat researcher urging them to have Dr Kelly summoned before the Commons Foreign Affairs Committee to give evidence. In an e-mail to Greg Simpson, Mr Gilligan said the issue of whether Dr Kelly had been his source was a "red herring", but said he should be asked what kind of threat he thought Iraq posed.
"If he is able to answer frankly it should be devastating," he said.
Mr Dingemans said the e-mail had not been disclosed to the inquiry by the BBC, which was conducting its own investigation as to why it had been withheld.
Mr Campbell denied a suggestion by Mr Dingemans that Dr Kelly had been caught in the middle of a "game of chicken by two great big institutions" the Government and the BBC.
He said no one involved in the case had ever thought it would end with Dr Kelly's death.
"The impression I got was of a very strong, resolute character, clearly of deep conviction, who had been in among difficult, stressful circumstances before, and I don't think it crossed anybody's mind it could take the turn it did," he said.




