THE Prime Minister has been plunged into another ''sleaze''

controversy after his Cabinet Minister in charge of open government

declared yesterday that sometimes Ministers have to lie to Parliament.

Mr Major will be forced in the Commons tomorrow to defend his Cabinet

colleague William Waldegrave for what MPs on all sides last night were

describing as a stunning piece of incompetence.

Mr Waldegrave told an all-party Commons committee that Ministers could

find it necessary ''in exceptional cases to say something that is untrue

in the House of Commons''.

He asserted: ''The House of Commons understands that and accepts

that.''

That assertion was immediately challenged and the Prime Minister will

have to face it tomorrow. Mr Waldegrave, who is already under threat for

his role in the highly controversial arms-to-Iraq decisions went

further.

''Much of Government activity,'' he said to the Treasury committee

''is much more like playing poker than chess. You don't put all your

cards up at the one time.''

This is the statement that has caused outrage and again challenged Mr

Major over the honesty of his Government.

Mr Waldegrave claimed later that he said nothing that Parliament was

not already fully aware of. He claimed that his comments had been

inflated by the media to carry more significance than MPs on all sides

would acknowledge.

He quoted in his defence the experience of two Labour Chancellors, Sir

Stafford Cripps and Lord Callaghan,both of whom were obliged to withhold

the whole truth from the Commons for legitimate reasons.

Mr Waldegrave told Channel 4 News: ''I am a little astonished at the

storm that was created.

''I gave absolutely straight answers to straight questions. If people

want to make that into a terrific furore I do not believe they are right

in doing so,'' he added.

But he is judged to have blundered again in a way that puts the

beleaguered Government further on the defensive. The comments arose from

a letter in the Daily Telegraph on February 19 from Sir Robin Butler,

the Cabinet Secretary and head of the Civil Service.

Mr Waldegrave was being challenged on Sir Robin's claim: ''The

questions whether a statement is complete and whether it is misleading

are separate. In the real world it is frequently the case that one

cannot say all one knows. In that situation one should avoid misleading,

if one possibly can.''

Mr Waldegrave told the committee yesterday: ''What Sir Robin was

saying is that in exceptional cases it is necessary to say something

that is untrue to the House of Commons. The House of Commons understands

that and has always accepted that.''

Former Prime Minister Lord Callaghan resigned as Chancellor in the

Wilson government because during a devaluation crisis he had told the

House that there would be no devaluation. He moved to Home Secretary.

It is accepted by Parliament that when a Chancellor is trying to

defend the pound he cannot tell the whole truth and Lord Callaghan lied

in the course of duty but having done so felt he could not continue as

Chancellor of the Exchequer.

The House also understands that, in a severe case of national security

which might involve the lives of British spies abroad, the truth has to

be curtailed.

But the performance of Mr Waldegrave yesterday was maladroit and

shocked his fellow Ministers and senior Tory back benchers.

Mr Michael Meacher, Labour's spokesman, was quick to exploit the

Waldegrave gaffe. ''His doctrine that there are a number of exceptional

circumstances in which it is necessary to mislead Parliament exposes

just how relative Ministers' commitment to truthfulness has now become.

''With the single exception of the period before devaluation, there is

no such class of circumstances when Ministers lying to the House can be

justified. Trust and credibility are at the heart of democracy and if

this dangerous and highly damaging doctrine were once accepted,

confidence in Ministers, already at the lowest ebb since the Second

World War, would completely collapse.''

Labour will now intensify its attack on Mr Major over the Lord Justice

Scott inquiry into arms to Iraq and the row about the connection with

arms deals and the #275m Malaysian dam project.

Mr Meacher said last night: ''This doctrine would give the Government

carte blanche to go further still. In all Ministers' dealings truth

should be an absolute. The Prime Minister should repudiate Mr

Waldegrave's accommodation with dishonesty.''

The Waldegrave blunder will put Mr Major under increased pressure when

the Commons demands to know when precisely it is permissible for a

Government Minister to withold the whole truth from Parliament.

It also comes as Labour leader John Smith is complaining vehemently

that a private discussion he had with Mr Major last Wednesday in the

Prime Minister's room at the Commons about the Prevention of Terrorism

Act was leaked.

This is another damning indictment of the Government. It undermines

the claim that Mr Waldegrave was making last night that in certain

circumstances in the interests of the nation special knowledge cannot be

revealed to the Commons.

Private meetings of privy councillors, like the Prime Minister and the

Leader of the Opposition, have always been kept secret.

In the Commons yesterday Mr Major was taken by surprise by Mr Smith on

the issue of compensation to the victims of crime, which the Government

is trying to change and thus save #250m by the end of the decade.

Last night, the Prime Minister was demanding to know why he had been

badly briefed on the issue and the full details of Mr Waldegrave's

performance, which was described by Labour MP Giles Radice, who was

chairing the session of the Treasury committee yesterday, as ''a

remarkable statement for a Minister''.

MPs afterwards were saying that Mr Waldegrave's utterances broke with

all precedent. Half-truths to the House of Commons are a particularly

touchy subject and Mr Waldegrave has blundered into an area that causes

the Prime Minister intense embarrassment.

A July Cabinet reshuffle is forecast and after yesterday's performance

by Mr Waldegrave he will be promoted to pole position for retirement to

the back benches.