A relieved Tony Blair basked in victory yesterday and was set to make a major domestic policy speech after his surprising, near-total vindication in a British judge?s inquiry into an Iraq weapons scientist?s suicide.

Senior judge Lord Hutton absolved the prime minister and his government of any serious wrongdoing in the death of David Kelly and said a BBC allegation the government deliberately doctored intelligence to justify war in Iraq was unfounded and wrong.

The BBC, by contrast, was reeling from heavy criticism in the Hutton report that may affect its worldwide renown. The chairman of the BBC?s governors, Gavyn Davies, quit, and his colleagues were to hold a crisis meeting on Thursday.

Many were amazed at the extent to which Blair escaped censure from Hutton in a report that had the potential to sink him had he been directly blamed for outing Kelly. The scientist killed himself last June after being named as the source for a report on BBC radio that Blair?s government ?sexed up? intelligence to justify war in Iraq.

One newspaper splashed a picture of a grinning Blair on its front page with a halo over him and the headline ?Saint Tony?. Another left its front page virtually empty with the question ?Whitewash ?? in red letters swimming in a white background.

The saga had haunted Blair for months, exposing him to accusations his government was obsessed with spin and had treated Kelly cruelly. But delivering his findings on Wednesday, Hutton sided with the government on all major questions, saying leaders believed the intelligence they published on Iraq was true, and had no ?underhand strategy? to expose Kelly.

Yesterday?s speech was expected to be an effort by Blair to retake the initiative on domestic policy, after days of political turmoil unprecedented in his six-year rule.

At the beginning of the week Blair faced a mutiny from his own party in a parliamentary vote on education policy. Instead, he squeaked through by just 316-311 votes. ?Mr Blair faced two serious hurdles this week, a ?double or quits? moment unlike any he has been through since becoming Labour leader,? senior BBC political commentator Andrew Marr said. ?The short answer is that it?s double.? Marr said the Hutton report ?was so good for Tony Blair that some of his closest allies in the government were worried that it was frankly too good? and may look biased. Even Blair?s Defence Secretary Geoff Hoon ? all but universally written off months ago as the inevitable scapegoat for Kelly?s death ? escaped serious criticism.

Hutton saved most of his ire for the BBC, damning the broadcaster for airing its story and standing by it without adequately checking whether it was true.

Blair?s main right-wing parliamentary opponents, the Conservatives, were clearly wrongfooted by Hutton. They had gone on the attack over the Kelly affair in the past few weeks, only for the judge to leave them with virtually no ammunition.