A former Post Office investigator deleted part of a draft witness statement that referred to the Horizon IT system’s failures, before the criminal prosecution of a post office operative, a public inquiry has heard.

Graham Ward, a former Post Office financial investigator, was questioned before a public inquiry examining what MPs have described as one of the biggest ever miscarriages of justice.

The state-owned body wrongly prosecuted hundreds of post office operatives, alleging financial shortfalls at their branches. It has since emerged that the Post Office’s Horizon IT system was not reliable as it suffered from bugs, errors and defects.

Ward was asked about changes he made in 2006 to a draft witness statement from Gareth Jenkins, an IT engineer at Fujitsu, the company that developed the Horizon IT system.

The Post Office had wanted to use Jenkins’ statement in the criminal prosecution of Noel Thomas, a post office operative from Anglesey, north Wales, who is one of the highest-profile victims of the scandal.

Thomas was prosecuted and jailed for nine months for false accounting in 2006 but had his conviction quashed in 2021.

The inquiry was shown a copy of the draft witness statement made by Jenkins to which Ward made changes highlighted in red.

Ward sent an email to colleagues in March 2006 in which he said the statement needed “more work” and he attached a revised draft in which he had made changes and taken out some “potentially very damaging” words.

The inquiry was told that, in the revised draft, Ward had deleted Jenkins’ assessment: “There has been some sort of system failure. Such failures are normal occurrences.”

Ward had also added a note to the document that said “this is a really poor choice of words [which seems to accept that] failures in the system are normal and therefore may well support the postmasters’ claim that the system is to blame for the losses!!!!”

Jason Beer, the counsel to the inquiry, put to him that he had deliberately made the changes as he knew it was evidence that could support Thomas’s defence that the Horizon IT system was to blame for the losses.

“Do you accept by your conduct you removed material information from Mr Jenkins’ witness statement at a time a prosecution was afoot against Mr Thomas?” Beer asked him.

Ward replied: “No I don’t. I think the decision to remove that had to have been Mr Jenkins’ decision. I made a comment and I made a review and I accept that I shouldn’t have been doing that but the final decision to make that statement – what went in there – that was for Mr Jenkins to decide.”

Beer continued: “Can I suggest this was a rather sloppy attempt at covering up in criminal proceedings evidence of system faults in Horizon?”

Ward replied: “No absolutely not. I’m not trying to cover up anything at all. I am just trying to get a statement correct,” he replied.

Ward added: “Back in 2006 Horizon [IT system] integrity wasn’t an issue for us at all ... I was trying to get a statement correct … That was my intention. I am really sorry for how it comes across, I really am but I was trying to do my job.”

Ultimately, the statement was not heard in court as Thomas pleaded guilty to false accounting on the basis that he accepted that Horizon was working perfectly, and there was not a jury trial.

Kay Linnell, a forensic accountant and adviser to the post office operatives, told the inquiry that the prosecutions should never have happened and the Post Office engaged in “an extreme form of self-justified bullying” akin to “shooting fish in a barrel”.

“It seems to me that POL [Post Office] senior staff have perpetrated a cover-up apparently at any cost to them to hide their criminal theft of funds from SPMs [subpostmasters], possibly orchestrating a conspiracy to pervert the course of justice and endorse or commit perjury in the court by themselves or others,” she said in a witness statement.

She told the inquiry that she had bumped into Paula Vennells, the former Post Office chief executive, at Bonn airport on 17 September 2014 and spoke to her about speeding up dealing with the claimants.

In her witness statement she said she had been “shocked by the extent of Paula Vennells’ misrepresentations” of their conversation. “Her summary is inaccurate, misleading and mainly untrue,” she said.

The Solicitors Regulation Authority, which regulates solicitors, said it had 20 live investigations into solicitors and law firms who were working on behalf of the Post Office or Royal Mail.