The former Post Office boss Paula Vennells killed a review that would have exposed the Horizon IT scandal more than 10 years ago after being told it would make “front-page news” but insisted she was not part of a cover-up.

During a second day of giving evidence at the public inquiry into the scandal, Vennells, who led the Post Office for nine years, said a different decision could have avoided a “lost decade” for persecuted branch operators.

Vennells already knew at the time of her decision in July 2013 that Gareth Jenkins, an engineer at Fujitsu who designed the Horizon accounting system, had withheld information from the courts about bugs in the software and was regarded as an “unsafe witness”.

Branch owner-operators continued until 2015 to be prosecuted and hounded, leading to some taking their own lives, over apparent shortfalls in funds at their branches caused by faults in Horizon. The Post Office did not stop fighting attempts to appeal against the convictions until 2019.

The latest revelations from the inquiry emerged from emails that followed Vennells’ receipt of a limited but critical independent report by Second Sight, a fraud investigation firm, into the claims of branch owner-operators.

She had asked a number of executives in an email why there might not be a full historical review of about 500 cases of post office operators accused of false accounting.

The Post Office’s then director of communications, Mark Davies, messaged Vennells about his concerns that such a move would “fuel the story” beyond the “usual suspects” who were reporting on potentially unsafe convictions.

“If we say publicly that we will look at past cases … whether from recent history or going further back, we will open this up very significantly into front-page news,” Davies wrote. “In media terms it becomes mainstream, very high-profile.”

Vennells responded: “You are right to call this out. And I will take your steer, no issue.” She went on to write that the most urgent objective was to “manage the media”.

Jason Beer KC, the lead counsel at the inquiry, asked Vennells: “It is a grossly improper perspective, isn’t it?”

“It is, yes,” she answered.

Beer asked Vennells whether she had stayed in contact with Davies after she left the Post Office in 2019. “I did,” she answered.

“Did you exchange messages with Mr Davies about media statements you might make and the media lines you might take in the announcement of this inquiry?” Beer asked.

“I believe that the inquiry has texts that showed that,” she responded.

“He [Davies] was still advising you in 2020 about the lines to take in your media statement?” asked Beer.

“I had kept in touch with Mr Davies for reasons which were very personal to him,” Vennells replied. “I think he offered advice at one point in time.”

Vennells denied that her decision not to review the many miscarriages of justice had been led by her public relations adviser but apologised about a further email in which she had suggested that Davies use “exception” in press releases as a “non-emotive word for computer bugs, glitches, defects”.

After the Second Sight report, the Post Office dumped plans to review convictions and instead opened a “mediation scheme” through which complaints could be addressed.

According to papers seen by the inquiry, the organisation judged that this would “take the sting out of the issue as a media story”.

Vennells sent an email to senior executives in August 2013 concerned that this would lead to payouts to victims.

“When we discussed this, the hope of mediation was to avoid or minimise compensation,” she wrote. “You explained that there were steps in place to advise [post office operators] entering the process that this was a chance to be heard and not to expect compensation. How are we planning to manage these expectations. And where compensation may be offered, you mentioned small figures in the £3-5k band; can we give a range of costs?”

After an emotional first day of evidence on Wednesday, Vennells largely maintained her composure as Beer questioned her over the decision not to launch a full forensic investigation into claims of unsafe convictions that had emerged in some media, including Computer Weekly.

Vennells repeatedly told the inquiry that she could not recollect events, and denied any knowledge of a conversation recounted by the Post Office’s then general legal counsel, Susan Crichton, on the eve of a board meeting in July 2013.

Crichton had told the inquiry she informed Vennells that she believed there would be “many successful claims arising from past wrongful prosecutions”.

To audible groans from the audience at the inquiry, Vennells responded: “I don’t recall that.” She added: “I would not cover anything up.”

Crichton was criticised internally for commissioning Second Sight. Vennells wrote in a memo, seen by the inquiry, that she had “put her integrity as a lawyer above the interests of the business”.

Five days after the email exchange between Vennells and Davies, the Criminal Cases Review Commission (CCRC) wrote to the Post Office’s chief executive to request information about any knowledge the organisation had about faults in the Horizon system.

Vennells said she passed on the correspondence to Crichton and would not have requested for there to be any lack of disclosure.

Beer asked Vennells whether “the right and honest thing for the Post Office to have done” would have been to let the CCRC know immediately about the doubts over the evidence of Jenkins.

Vennells said: “Yes it would.”

Beer went on: “That didn’t happen for years and years, did it?”

“I understand that to be the case now,” Vennells replied.