The extraordinary deployment of the Official Secrets Act against the Guardian newspaper for investigating the News of the World’s hacking of murdered Milly Dowler’s phone opens an immensely important political battle.

It goes all the way to the rotten heart of Britain’s elected dictatorship and undemocratic constitution. Who rules? Who decides what is in the public interest? Can the Murdochs and their associates continue as they have?

As well as extending all possible forms of solidarity to the Guardian, its Editor and journalists for their relentless, outstanding work, it is vital that this matter is not seen as just as a clash between them and the police over a Guardian scoop. It is more important than that.

What seems to have happened is that someone, perhaps an honest police officer, involved in the investigation of what the News of the World did, was so appalled as Murdoch rollered his way to further domination of our politics and culture that he or she informed the Guardian of the Dowler hack.

Infuriated, the authorities have used the Official Secrets Act to try and oblige the Guardian to reveal its source.

Obviously, the Guardian can do no such thing. Equally obviously, if the authorities had used any other procedure a court would have ruled that the Guardian has the right publish, as it was clearly acting in the public interest.

Which explains the turn to the Official Secrets Act. For this now explicitly rules out any public interest defence.

There is a very revealing history here, which should never be forgotten. It goes back to the 1982 Falklands War.

Margaret Thatcher knew that her premiership depended on her winning the war, as she had been personally responsible for ordering the initial withdrawal of the UK’s naval defence of the islands.

After intense negotiations, at the end of April 1982 the USA broke from its original neutrality and announced it would back the UK. At which point the British government ordered the sinking of the Argentinean battleship the Belgrano. Even though it was sailing away from the British ‘Task Force’ and was outside the 200 mile ‘exclusion zone’ at the time, it was torpedoed on 2 May with the loss of 323 lives (and led to the Sun’s infamous ‘Gotcha’ headine).

The Argentineans were hardly in a place to complain as they were idiotic to have gone to war in the first place. But a number of loyal British subjects were appalled. One of them was the Labour MP Tam Dalyell who asked a series of awkward questions after continually partial and inaccurate accounts of what happened were given to Parliament.

A senior civil servant in the Ministry of Defence, Clive Ponting, was concerned that his Minister was not being honest with his parliamentary answers. He provided Tam Dalyell with documentation to assist his probing the government. Ponting was charged under the 1911 Official Secrets Act. He agreed he had leaked secret information, which he could hardly deny. But offered in his defence that he was acting in the public interest by giving information to an MP in order to prevent Parliament from being misled.

The judge famously instructed the jury to find Ponting guilty because “The ‘public interest’ is what the government of the day says it is”.

The jury famously disagreed and found Ponting not guilty. He had torpedoed the Official Secrets Act.

And the result was…. The Thatcher government re-wrote the Act so that now, in its 1989 version, it explicitly removes the right to plead the public interest in any breach of official secrecy. Today, so far as the Official Secrets Act is concerned, the public interest is indeed whatever the government says it is.

It is now time for this scandal to be revoked. A Commission has been created to consider a British Bill of Rights to replace the Human Rights Act. The idea is that it will build on the European Convention by, for example, including the right to trial by jury.

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But what is the value of the right to a trial by jury when the jury is forbidden from exercising its judgment when it is ideally placed to do so, namely in matters of what is the public interest? It should surely be a fundamental right in this country that one can always plead a public interest defence before a jury.

At the very least the Ponting clause forbidding public interest defence must be removed from the Official Secrets Act. Until then we are stuck in the era of Thatcher and Murdoch and the undead will remain more than willing to reach out and destroy a free press.