THE Government received ''approaches'' warning that Iraq was trying to

build a supergun two years before Customs seized steel pipes destined

for the project, it emerged yesterday.

The Scott inquiry heard that a confidential briefing prepared by

Treasury counsel Julian Bevan for Customs referred to approaches made to

both the Ministry of Defence and the Department of Trade and Industry in

1988.

Mr Bevan's note appeared to offer confirmation of claims by former

Tory MP Sir Hal Miller that he had tried to help one of the companies

involved -- Walter Somers -- and warn the Government at that time that

Saddam Hussein was trying to build a massive gun.

The Government has never acknowledged Sir Hal's claims.

After the seizure of the tubes at Teesport in April 1990, the then

Trade Secretary Nicholas Ridley told Parliament the move was the result

of intelligence recently received by Customs that they were parts for

the supergun.

As a result of the seizures, a number of arrests were made, including

Walter Somers's managing director Peter Mitchell and Mr Christopher

Cowley, formerly of SRC, the Brussels-based company which was designing

the gun for Saddam.

Mr Bevan advised Customs that the approaches to the Ministry of

Defence and Department of Trade and Industry meant that a jury was

unlikely to convict the two men and the prosecutions should not go

ahead.

However, the inquiry heard that Customs chairman Sir Brian Unwin and

his senior officials fought to overturn his advice in the course of two

meetings with the then Attorney General Sir Patrick Mayhew.

Customs' senior lawyer Michael Saunders urged Sir Patrick to allow

them to go ahead with the cases even though they did not have sufficient

evidence to secure convictions because of the ''exceptional

circumstances'' surrounding the affair.

However, he was told by Sir Patrick that there was no precedent for

such an action and that it would be ''tough'' on the defendants.

Giving evidence yesterday, deputy chairman Sandy Russell, the then

Customs director in charge of policy, now admitted that they had been

unhappy about ''throwing in the towel'' over the prosecutions.

He said the investigation of the supergun affair had been an

international operation of herculean proportions. Failure to prosecute

would have been seen as a ''hammer blow'' to the system of sanctions

against Iraq.

He said they had wanted to challenge Mr Bevan's ''gut judgment'' that

a jury would not convict.

The inquiry continues.