A Post Office led by “weak and arrogant” executives who were “culpably dishonest” and had a culture of “contempt” towards branch operators was primarily responsible for the Horizon IT scandal, the government has said.

Nick Chapman, giving the closing statement to the public inquiry on behalf of the Department for Business and Trade (DBT), added that ministers, the software’s developer Fujitsu, the federation representing post office operators and agencies such as UKGI, which manages the taxpayer’s stake in the Post Office, had all “contributed to this scandal”.

However, the government lawyer singled out the Post Office for its “despicable” role in the largest miscarriage of justice in British history, which resulted in the wrongful prosecution of more than 900 post office operators between 1999 and 2015.

Chapman said the scandal had its origins in the “Post Office’s corporate attitude of contempt for the very people who are the face and the heart of the institution”.

“The Horizon scandal is also a story of false assurances, a culture of secrecy, of spin doctors, untruths and half-truths repeated as mantra to board members, officials, ministers, MPs and the Great British public,” he said. “Of institutional and individual arrogance, incompetence, dishonesty and cover-up.”

Chapman said that the department was not attempting to shirk its share of the responsibility and, as the sole shareholder in the Post Office, government is “ultimately accountable for the actions perpetrated by” the organisation.

“The simple and inescapable truth is [government] failed to prevent this scandal from happening,” he said.

However, he said the corporate governance structure in place to ensure effective oversight of the Post Office relies on “honest and truthful information”, and ministers were “consistently managed, misled and deceived”.

“The evidence heard by the inquiry indicates the Post Office and several of its senior people were, at best, recklessly indifferent to the truth and, at worst, culpably dishonest”,” he said. “Time and again the Post Office provided materially false, misleading or incomplete information to government ministers, parliament, criminal courts and the British public at large.”

He said the starting point for this resided in the “institutional culture” at the Post Office.

“A culture which seemingly tolerated indifference to the truth,” said Chapman. “A culture which looked down on, mistrusted and exploited postmasters.”

He said the body’s management had been at times “weak, arrogant, unintelligent, defensive, incurious and close-minded”.

Earlier, the legal team of the former Post Office chief executive Paula Vennells told the inquiry to treat the evidence of some witnesses “cautiously”, suggesting a desire for “self-preservation” meant they were trying to scapegoat her for the scandal.

Samantha Leek KC, delivering the closing statement on behalf of Vennells on Tuesday, said that as her client had become a high-profile figure in the scandal others had tried to “point the finger at her”.

“When witnesses have given recent evidence of matters relevant to Ms Vennells without it being supported by contemporaneous documents, this evidence should be approached cautiously,” she told the hearing.

“It is inevitable, having regard to the very human desire for self-preservation, that witnesses will now seek to distance themselves from Ms Vennells.”

Lawyers for Vennells, writing on her behalf in closing submissions to the inquiry, said no evidence had emerged to show she “acted in bad faith”.

Vennells has previously publicly named five executives who she claimed were to blame for the scandal, but her lawyers said she had “no desire to point the finger at others”.

Kate Gallafent KC, giving the Post Office’s closing statement on Tuesday, said there was “deep regret” on the reliance on Fujitsu, which built and manages the Horizon system, adding that the organisation was the “subordinate” partner in the technical and contractual relationship.

Fujitsu’s legal representative, Richard Whittam KC, hit back at the Post Office, accusing it of using its closing submission to try to “obfuscate its proper share of responsibility by seeking wrongly to deflect blame on Fujitsu and other third parties”.

“The Post Office has been aware for at least 25 years of the potential for – and existence of – bugs, errors and defects,” he said.

“Fujitsu has identified at least 70 individuals within Post Office and Royal Mail in relation to whom the inquiry has received unequivocal knowledge of bugs, errors and defects. This includes members of boards, senior executives, in-house lawyers, as well as individuals working in Post Office’s security and investigations teams.

“The inquiry is entitled to infer from the breadth and depth of awareness of bugs, errors and defects it is likely that key institutional decision makers did in fact have such knowledge.”

The government said on Tuesday that more former post office branch owners would be eligible for compensation, after an independent report found that IT accounting software developed by the Post Office that was used between 1992 and 1999 could also have been faulty.

The Post Office pursued prosecutions on theft and false accounting charges, or post office operators were forced to make up shortfalls with their own money, according to the report on the Capture accounting software.

The publication of the findings of the public inquiry are expected to be published next year.