Turnbull, Thatcher and Packer: Declassified files reveal tycoon’s brush with notorious Spycatcher case

Australian media mogul Kerry Packer was almost dragged into the Spycatcher case of the 1980s to help negotiate a deal that would have saved Margaret Thatcher’s British government from an embarrassing court loss that elevated the public and legal standing of Malcolm Turnbull.

Documents released on Friday by the British National Archives show key officials within the Thatcher government dramatically underestimated Turnbull, as well as Justice Philip Powell, who ruled in favour of former British spy Peter Wright.

Malcolm Turnbull with former British spy Peter Wright after their legal victory in December 1986.Credit: John Nobley

In his book Spycatcher, Wright alleged that a former head of the British security service was a Soviet mole during the 1950s and 1960s. He also claimed former British Labour prime minister Harold Wilson was investigated by MI5 over claims he was being paid by the Soviet Union.

Both allegations had been dismissed by official agencies in Britain. They had also been the source of other books.

But the Thatcher government prevented Wright, who by the mid-1980s was living in Tasmania as an Australian citizen, from publishing Spycatcher in Britain. He then sought to publish the book in his new home nation, prompting the UK to take legal action to block it.

During the November 1986 trial, Wright and his publisher were represented by Turnbull.

The archives’ documents, which include handwritten comments from Thatcher, show that during the trial Turnbull suggested an out-of-court settlement that would have brought the legal proceedings to a halt.

Kerry Packer, who had recently sold Channel Nine to Alan Bond for $1 billion (and would buy it back from Bond for $250 million), was proposed as the mediator between the UK government and Wright.

But the idea was rejected, with Thatcher constantly reassured by her legal representatives that they would ultimately win the court case.

Thatcher and her government were being told that even if the court found in Wright’s favour, there was a better than 50 per cent chance it would be overturned either on appeal or in the High Court.

But both the NSW Court of Appeal and the High Court backed Powell’s decision.

British government document with a note from then prime minister Margaret Thatcher.Credit: nationalarchives.gov.uk

In a note sent to Thatcher in early December, a British lawyer in Sydney wrote that Powell’s determination contained “no reasons, mostly assertions”. In the note’s margins, Thatcher responded: “We must appeal in my view – and all the way.”

In another handwritten message, on learning some of the accusations in Wright’s book, Thatcher noted: “I am utterly shattered by the revelations in the book. The consequences of publication would be enormous.”

The Spycatcher disclosures were the least of the government’s troubles.

Margaret Thatcher was assured her government was likely to succeed in the Spycatcher case.Credit: Hulton Archive

Thatcher’s cabinet secretary, Sir Robert Armstrong, admitted under questioning from Turnbull that the government had been “economical with the truth”, causing major problems back in Britain.

Most papers in England were unable to report on the Spycatcher trial due to a local injunction. But in Scotland, papers took delight in the giving daily updates on the events taking place in Australia.

The documents also reveal British concerns that an American publisher that would release Spycatcher there. The UK government considered taking legal action in the United States to prevent its release, but this was rebuffed by American agencies due to the US Constitution’s first amendment protecting free speech.

At one point, then-British arts minister Richard Luce warned that American librarians attending an international conference could distribute Spycatcher across the UK.

“With many American librarians coming over … we know that at least one British librarian has arranged to receive a copy of Spycatcher from a colleague for his library,” he noted.

Labour members of the European parliament started reading out extracts of the book. These were included in its equivalent of Hansard, which was to be released through the British government’s own printer.

The book eventually went on sale in the UK in 1988 after England’s Law Lords confirmed it did not contain any secrets that risked British security.

Wright, who died in 1995, was denied receiving royalties on British sales of the book, but he eventually made millions from Spycatcher around the rest of the world.