Judges on the point of revolt

In an unprecedented move, the Lord Chief Justice, Lord Phillips, said it had proved impossible to agree the judiciary's relationship with it.

He also told astonished MPs that he only learned of the most fundamental constitutional reform for decades from a Sunday newspaper.

He said he was nearing the point of invoking his right to report to Parliament that the Lord Chancellor, Lord Falconer, was failing to protect the independence of the judges.

That so-called "nuclear option" has never been used. It would plunge Britain into deep constitutional turmoil, as well as leaving Lord Falconer's position untenable.

Government officials had been locked in talks ahead of Lord Phillips' appearance before a Commons committee last night.

A deal had been expected but the Lord Chief Justice told them that had proved impossible.

He demanded a full-scale inquiry into the constitutional implications of the rushed Government decision to split the Home Office on May 9.

The judges fear their independence will be compromised as the Lord Chancellor, who heads the new ministry, has taken responsibility for prisons and probation as well as courts.

There is particular concern that judges will be pressed to pass sentences based on factors such as prison overcrowding.

They are also demanding that court budgets are not used to fill funding gaps in the prison and probation services.

Lord Phillips told the Commons constitutional affairs select committee: "The discussions have not resulted in agreement.

"There is a need to have a fundamental review in light of the creation of the Ministry of Justice.

"I hope common sense will prevail and it will become quite apparent that we must have this inquiry."

Asked about making an emergency complaint to the Speaker that the independence of judges was being compromised, Lord Phillips said: "We may well be getting near that point.

"I have up until this moment had a good relationship with the Lord Chancellor. He and I learned together that there was a possibility of a new Ministry of Justice when we read the Sunday Telegraph."

Lord Phillips told MPs: "We've tried very hard to reach an interim agreement to tide over the period that will elapse before a review, and any implementation of it can take effect."

But the Lord Chancellor did not agree there was a need for a review. "This has become a fundamental difference between us," he said.

Lord Phillips accused Home Secretary John Reid of being behind the split of the Home Office without any proper consideration of their impact on the justice system.

"The impetus of this position was anxiety on his part to clear the decks so that he could make a concerted attack on terrorism," he said.

"It was not a decision taken because it was thought that it was a very good idea to have a Ministry of Justice."

The Tories said the Government was to blame for drawing up major reforms "on the back of a fag packet" and forcing them through before Tony Blair leaves office.