A former MP has told a public inquiry that the Post Office appeared to have been operating a “behind-the-scenes deception process” about the reliability of its faulty Horizon computer system.

James Arbuthnot, who is now a Conservative peer, began campaigning for post office operators in 2009 after taking up the case of Jo Hamilton, who was wrongly convicted of theft.

Lord Arbuthnot told the public inquiry into the Post Office scandal that from 2009 onwards he was repeatedly “brushed off” by the Post Office executives and ministers over his concerns about the reliability of its Horizon computer system.

The state-owned Post Office hounded operators for more than a decade alleging financial shortfalls in their branch accounts and demanding they pay back shortfalls often amounting to thousands of pounds. It has since emerged that these discrepancies were caused by IT bugs within the Post Office Horizon computer system in what has been described as the worst miscarriage of justice in British legal history.

Arbuthnot told the inquiry that he and five other MPs met Paula Vennells, the chief executive of Post Office; Alice Perkins, its chair, and two other senior Post Office executives in June 2012.

A note of the 2012 meeting, shown to the hearing, showed that Vennells told MPs that “every case taken to prosecution that involves the Horizon system thus far has found in favour of the Post Office”.

Jason Beer KC, counsel to the inquiry, told the hearing that this was “not true” and asked Arbuthnot whether he had been made aware that the Post Office knew at that time there were IT bugs in the Horizon system and that there had been three acquittals of post office operators in criminal trials.

“We were all unaware,” Arbuthnot said, adding that the Post Office had reassured MPs in 2013 that the Horizon system was “robust” and he was not told that the Post Office knew by then that the computer system could be accessed remotely by Fujitsu, the Japanese company that developed the technology.

Arbuthnot told the inquiry that if he had been aware in 2013 he would have said that “there had been a large number of miscarriages of justice and that convictions that had been secured by the Post Office were unsafe”.

He said: “They knew there was a large number of bugs in the system which they had not told MPs about. They were operating … some sort of behind-the-scenes deception process which suggests to me now that they were stringing MPs along in order to preserve the robustness of Horizon, the existence of Horizon and possibly the existence of the Post Office. That’s what I know now but I didn’t know that at the time.”

The peer told the inquiry that he was repeatedly told by ministers that the Post Office was “arm’s length” from the government, but said this was akin to owning a dangerous dog. “You cannot say that the dangerous dog has an arm’s-length relationship with you if the dangerous dog behaves badly,” Arbuthnot said.

Arbuthnot also described a meeting between Post Office executives and MPs in November 2014 as a mediation scheme began to fall apart, when it tried to exclude convicted post office operators from taking part.

He said the meeting was controlled by Angela van den Bogerd, a former people services director at the Post Office, and Chris Aujard, its former general counsel.

“Paula Vennells seemed almost cowed by their stronger personalities and said little. I told her she was breaking her word. I sensed, rightly or wrongly, that she felt ashamed. The meeting broke up in acrimony,” Arbuthnot said in his witness statement, adding that after September 2013 the Post Office had become more “defensive, legalistic”.

Sir Anthony Hooper, a retired court of appeal judge who became chair of the working group for the mediation scheme, told the inquiry he had warned Post Office executives “over and over again” that their case “did not make sense”. He said he could not understand “where the money had gone” and it was “very unlikely” the prosecuted post office operators were guilty of stealing cash.

He called it the “greatest scandal I have ever seen in the criminal justice process” and said he “feared miscarriages of justice” but his mediation scheme was “never going to find a smoking gun” because he was looking at individual cases rather than investigating the Horizon system.

More than 900 post office operators were convicted using evidence from the Horizon computer system, including 700 convictions secured by the Post Office between 1999 and 2015. So far 103 convictions have been overturned and new legislation is being introduced to quash the convictions of post office operators prosecuted between September 1996 and December 2018.

The inquiry, which has been running since 2022 and is looking at what went wrong, continues.