TONY BLAIR was facing a busy schedule last Thursday morning and didn’t hear the bombshell dropped by Clare Short on Radio 4’s Today programme. He had a cabinet meeting to chair, and after that a press conference to announce a new initiative in Africa. Spying was not on his mind.

True, David Hill, his communications director, mentioned Short, a renegade former minister, in his morning briefing but time was pressing and Blair moved swiftly on. The cabinet, at which Patricia Hewitt droned on about free trade, ran to mid-morning. Only then, when the “murder board” went to work on Blair, did Short’s latest outburst hit home.

The murder board, nicknamed after American lawyers who drill homicide suspects for trial, is the group of Blair’s trusted advisers who prepare him for public grillings. They began to pepper him with awkward questions likely to arise at the looming press briefing.

“Are you facing a pensioners’ revolt on council tax?” one aide asked. “Isn’t this announcement on Africa just a rehash of an old conference speech?” posed another. Then: “What are you going to do about Clare Short?”

This last test stumped Blair and his advisers. The seasoned spinners, including Jonathan Powell, Blair’s chief of staff, Baroness Morgan, his political adviser, and Godric Smith, his press spokesman, exchanged awkward glances.

That morning Short had accused the government of spying on Kofi Annan, the head of the United Nations, during crucial negotiations ahead of the Iraq war. She had read “transcripts” of his conversations, she said, implying that Britain had bugged Annan’s office or tapped his phone calls. “These things are done,” she said. “And in the case of Kofi’s office, it has been done for a long time.”

It was deeply embarrassing, possibly illegal and a clear breach of ministerial confidentiality.

What should Blair do, wondered his advisers: arrest “crazy Clare” for breaking the Official Secrets Act? It would look absurd, especially since a high-profile trial based on the act had collapsed the previous day. Withdraw the Labour whip? Downing Street had no desire to make Short, an MP popular in her constituency, any more of a martyr than she already pretended to be.

Deny the story? Tricky, if only because spying was meant to be a secret business never discussed by ministers.

As Blair faced a barrage of questions about the affair at the press conference that morning, his anger and impotence were almost palpable. Short, he declared, was “deeply” and “completely” irresponsible. She was also “entirely consistent”, he said — apparently in behaving disgracefully yet again. But he did not say she was wrong.

While there was confusion and plenty of misinformation over exactly what “transcripts” she had seen and where they had come from, there was no doubt among politicians, diplomats and former spooks that the UN was a hotbed of spies and eavesdropping.

One British former agent told The Sunday Times that MI6, the Secret Intelligence Service, has five people in New York dedicated to the UN. “It is their entire job,” he said. “They bug places and they have been doing it for years.”

UN officials lined up to agree. Rolf Ekeus, a former chairman of the UN weapons inspectors, said he had routinely expected to be spied on and took precautions by sweeping offices for bugs and discussing sensitive matters only in parks or gardens.

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