The Home Office rejected an inquiry into the 7/7 bombings after officials warned that it might last years, cost millions and be unstoppable, newly released documents show.

Although the Prime Minister has publicly ruled out an inquiry on the ground that it would demoralise and undermine the security services, there is no mention of this danger in the papers released.

But the huge public expense of previous inquiries – ranging from £10 million looking into race killings to £155 million for Bloody Sunday – was highlighted by officials.

The Home Office declined to give the documents to The Times for 11 months, then came up with them just as Tony Blair’s resignation was dominating the news.

Survivors of the London bombings, backed by opposition politicians, have been vigorously demanding an independent inquiry into whether security blunders led to the 2005 massacre.

The clamour grew last week when it emerged that the ringleader Mohammad Sidique Khan’s name featured twice in MI5 antiterrorist operations more than a year before the bombings.

The Times asked the Home Office last June for information about whether a public inquiry should be held into the attacks by four suicide bombers which killed 52 commuters. In December, officials wrote back rejecting that request and arguing that as much information as possible had already been released.

They highlighted a report by the Intelligence and Security Committee (ISC) which, they claimed, “provides an independent assessment of the intelligence background”. That review cleared MI5 of blame for its failure to investigate Khan.

MPs and victims have protested that this committee lacks independence since it is appointed by, and reports to, the Prime Minister who is also responsible for the Security Service.

A document now released by the Home Office provides ammunition for the critics.

After considering a variety of types of public and private inquiry, looking at how powerful and independent each might be, officials turn to the body appointed by Downing Street. They note that the ISC is free from parliamentary control.

The document appears to have been censored as it finishes midway through a sentence followed by two-thirds of a page of white space.

The ISC chairman Paul Murphy, a former Labour minister, wrote to Tony Blair six days after the bombings saying the committee would examine the issues.

The Prime Minister has asked the ISC to look again at its findings in the wake of the fresh disclosures suggesting MI5 failed to monitor Khan.

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