Gordon Brown has given his strongest indication yet that the Government will hold an inquiry into mistakes made before and after the Iraq invasion.

Writing to the Fabian Society, the Prime Minister said there was a “need to learn all possible lessons”. He added, however, that while the situation in Iraq remained “fragile” the time for an investigation was not right.

His comments were in stark contrast to the views of his predecessor, Tony Blair, who ruled out an independent inquiry. They also followed a demand at the weekend from William Hague, the Shadow Foreign Secretary, for a Privy Council inquiry.

Jonathan Powell, Mr Blair’s chief of staff from 1995 to 2007, made the surprising admission yesterday that mistakes had been made by the Government and its allies in their preparation for the war’s aftermath.

Since succeeding Mr Blair last summer Mr Brown has stopped short of calling outright for an inquiry. Last September he said the time would come to discuss whether one should be held. His letter to Sunder Katwala, the Fabian Society’s general secretary, suggests he has accepted that one should be conducted.

In the letter, which has been obtained by The Independent, Mr Brown writes: “There is a need to learn all possible lessons from the military action in Iraq and its aftermath. There will come a time when it is appropriate to hold an inquiry. But while the whole effort of the Government and the armed forces is directed towards supporting the people and Government of Iraq as they forge a future based on reconciliation, democracy, prosperity and security, we believe that is not now.”

He added: “Despite the progress made on the security, economic and political fronts in Iraq, the situation remains fragile and could easily be reversed. At this critical time it is therefore vital that the Government does not divert attention from supporting Iraq’s development as a secure and stable country.”

Mr Powell’s remarks, on The Andrew Marr Show on BBC One, were the frankest acknowledgement so far from a member of Mr Blair’s inner circle of the shortcomings in Britain’s planning for war. He said it would take decades for the situation in the stricken country to become settled.

Mr Powell said: “The trouble with Iraq is we were kind of preparing for the wrong sort of aftermath. We made lots of preparations for humanitarian disaster, for the lack of water, of all that kind of thing, and what we hadn’t in my view thought through was the long-term nature of this.”

He added: “We probably hadn’t thought through the magnitude of what we were taking on in Iraq. This is something that will take many decades to sort itself out . . . I don’t think any of us had thought through this much bigger question of what we are dealing with.”

Mr Powell added that he regretted the “terrible suffering” of the Iraqi people. “No one in their right mind can possibly welcome that situation”, he said.

Mr Hague said that the fifth anniversary of the war was the right time for a full inquiry, and that clarity was needed on the future for Britain’s deployment in Iraq. He added: “It is very important to commence the full-scale Privy Council inquiry into the origins and conduct of the war, because if we are not going to start it now, five years on from the beginning of the war, then when on earth would we have such an inquiry? Lessons have got to be learnt, and visibly learnt, and we have got to start on that process now.”

The Liberal Democrats repeated their demands yesterday for an early and full withdrawal of British troops.

Nick Clegg, the party’s leader, said that the fifth anniversary of the invasion should be a reminder to the Government and the Tories not to “blindly” follow Washington’s lead.

“It is now time to recast British foreign policy in Britain’s interests, not those of Washington, starting with an early and full withdrawal of all remaining British troops in Iraq,” he said.

There have been four inquiries into different aspects of the war, including the Butler report into intelligence failings and the Hutton inquiry.

Thousands of protesters yesterday marked the fifth anniversary of the invasion with marches in London and Glasgow.

Times Recommends

• The bright side of this winter rain
• Story behind the picture: Snow Leopard, 2008
• Times Charity Appeal: The Place2Be