TONY Blair gambled with his job yesterday with a high risk strategy at the Hutton Inquiry into the death of weapons expert Dr David Kelly.

In a historic day at the Royal Courts of Justice in London, the Prime Minister placed his credibility on the line by accepting responsibility but denying he had done anything wrong in events leading up to Dr Kelly's apparent suicide.

In contrast to Defence Secretary Geoff Hoon's attempts the previous day to distance himself from decisions concerning Dr Kelly, Mr Blair accepted full responsibility for the controversy.

But he maintained that he had done nothing wrong - insisting that everything was done by the book when Dr Kelly came forward as the possible source of a BBC story claiming the Government had "sexed up" its dossier on Iraqi weapons.

Mr Blair told the inquiry that he had been in a "quandary" because initially it was not clear whether Dr Kelly was actually the source of the BBC story.

At the same time, the Commons Foreign Affairs Committee (FAC), which had already taken evidence on the issue from the BBC journalist Andrew Gilligan, was about to issue its report.

Mr Blair said he had been concerned that the Government would have been accused of a cover-up if the information was withheld from the committee, and he turned to senior officials for advice.

A meeting at No 10 on July 8 decided to issue a public statement without naming Dr Kelly.

"The reason why I was so anxious that we dealt with this with the senior civil servants in a collective way was so that the decision that we took was done as far as possible by consensus," he said.

"My concern was to get that information, not concealed but out there so no one could say afterwards that this was something you were trying to cover up. That was the view of the meeting.

"I say this in absolutely no sense to say this was the civil servants' decision. I take full responsibility for the decision."

However, he said that he had not been aware of any "specific decision" to issue a "question and answer" briefing to MoD press officers instructing them to confirm Dr Kelly's identity to journalists who came up with the right name.

He appeared to try to subtly distance himself from the controversial "naming strategy", saying: "In fairness to the MoD press people, it was difficult for them."

Mr Blair also explained to the inquiry why he, and his director of communications Alastair Campbell, had reacted so angrily to Mr Gilligan's report which claimed that the Government had deliberately "sexed up" the dossier which made the case for Saddam Hussein being a threat.

Mr Blair said: "This was an absolutely fundamental charge. This was an allegation that we had behaved in a way that, were it true, would have merited my resignation.

"It was not a small allegation, it was absolutely fundamental.

"This was an attack that went not just to the heart of the office of the Prime Minister but also the way your intelligence services operated. It went, in a sense, to the credibility, I felt, of the country."

The chairman of the BBC's governors, Gavyn Davies, gave evidence after Mr Blair.

He defended the BBC's independence and said it was right not to bow to Government pressure and retract Mr Gilligan's report.

He maintained that the BBC had never said that the Government had done something wrong - it had only reported that a source claimed the Government had done something wrong.

Putting Mr Davies on the back foot, Lord Hutton said he had "difficulty" in grasping whether the average listener would differentiate between the two.

Mr Davies also disclosed that the BBC was investigating an e-mail sent by Mr Gilligan to David Chidgey, a LibDem MP who is a member of the foreign affairs committee.

The inquiry has heard how Dr Kelly had been "totally thrown" by Mr Chidgey's questioning.

"Mr Gilligan was under enormous pressure and perhaps felt that the FAC was trying discredit him as a journalist and he needed to take steps to counter that," said Mr Davies.

Last night, Durham county councillor Paul Trippett, a friend and staunch supporter of Mr Blair, said: "I thought he did very well in front of the inquiry.

"There is a tremendous amount of pressure on him at the moment and he answered honestly, openly, fulsomely and in a statesman-like way."

The Trimdon councillor, who was one of five people who nominated Mr Blair for the Sedgefield seat in 1983, added: "I think it will help start to put this issue to bed."

Mr Trippett said that people in the Sedgefield area were supporting the Prime Minister 100 per cent. "This is his base and we have always put faith in him that he has done the right thing.