The prosecution is preparing to abandon the case against a former GCHQ employee charged with leaking information about a "dirty tricks" spying operation before the invasion of Iraq, the Guardian has learned.
Katharine Gun, 29, is due to appear at the Old Bailey next week where she has said she will plead not guilty to breaking the Official Secrets Act.
She has said her alleged disclosures exposed serious wrongdoing by the US and could have helped to prevent the deaths of Iraqis and British forces in an "illegal war".
The case is potentially hugely embarrassing for the government and would open up GCHQ operations to unwelcome publicity. Also damaging and politically threatening is her plan to seek the disclosure of the full advice from the attorney general, Lord Goldsmith, on the legality of the war against Iraq.
The government would almost certainly refuse to disclose such advice, arguing that opinions of its law officers are traditionally protected from the outside world. Ms Gun's lawyers were likely to argue she could not get a fair trial without seeing the attorney's advice on the war and the disclosure of GCHQ's activities.
Ben Emmerson QC, her counsel, told London's Bow Street magistrates court last month that she was being prevented from saying anything to her lawyers about her work at GCHQ.
Sources familiar with the case last night strongly indicated that the prosecution will ask the court to drop the case against her at a pre-trial hearing at the Old Bailey on Wednesday.
Ms Gun, a translator at GCHQ, was arrested in March but not charged until eight months later.
The long delay suggests that even then there was a fierce debate in government and GCHQ circles about the advisability of a secrets trial against an employee who said she acted out of conscience over an issue which divided the country.
Prosecutions under the Official Secrets Act need the consent of the attorney general. But the prosecution can advise the case should be dropped if a trial was considered to be against the public interest.
In sensitive cases in the past, the prosecution has dropped charges if the judge orders the disclosure of information the government and intelligence agencies say they cannot release.