The chairman of the inquiry into the Post Office IT scandal has warned he will not hesitate to attribute blame to any party which fails to disclose important and necessary documents.

Sir Wyn Williams insisted he will “use all the extensive powers at my disposal” to ensure documents are obtained, in the face of either accidental or deliberate failure to disclose them.

He spoke as the second phase of the inquiry into the scandal – which saw workers wrongly accused of theft, fraud and false accounting due to flaws within the Horizon computer system – got under way in London.

Between 2000 and 2014, more than 700 subpostmasters and subpostmistresses (SPMs) were prosecuted based on information from the accounting system.

However, in December 2019, a High Court judge ruled that the system contained a number of “bugs, errors and defects” and there was a “material risk” that shortfalls in Post Office branch accounts were in fact caused by it.

Since then, many SPMs have had criminal convictions overturned.

Phase Two of the inquiry, which was established in September 2020, is examining the procurement, design, pilot, roll-out and modifications of Horizon.

At the beginning of Tuesday’s proceedings, Sir Wyn heard submissions to adjourn the probe after it was stated that there had been a major lack of disclosure of documents on the part of the Post Office.

The inquiry was told the Post Office had notified the inquiry that it was “undertaking a significant organisation and review of a large number of boxes of hardcopy documents and files held at various Post Office locations throughout the United Kingdom”.

Counsel to the inquiry Jason Beer KC, said some of the recent document disclosures related to requests made as far back as a year ago, and that the “limited information” on when the Post Office might have fully completed its disclosure “puts the inquiry in a very difficult position”.

But he argued that, while it presents a challenge, there was “not sufficient reason to interrupt good progress that this inquiry is making”, as he said witnesses can be recalled at later stages if needed as a result of the disclosure of further relevant documents.

He said that an adjournment was likely to “delay and frustrate” the progress that has been made by the inquiry towards fair compensation for all victims of the scandal.

After hearing submissions in favour of an adjournment from lawyers for victims of the scandal, Sir Wyn said he had decided the inquiry should proceed as planned, as he was “satisfied that I can manage disclosure” and having considered the “significant impact” any further delay would have on the inquiry’s timetable.

But he warned that disclosure of required documents will be an issue that is taken seriously.

He said: “I wish to make it clear that if I reach a conclusion at any time that there is either accidental or, even worse, deliberate non-disclosure of relevant documents, I will use all the extensive powers at my disposal to obtain the documents which have not been disclosed.”

He added that, if necessary, he would “attribute blame to any party where that is justified in relation to non-disclosure – I will not deflect from being critical”.

Mr Beer noted that having to begin the second phase of the inquiry with a discussion on problems around disclosure was “something of a paradox, if not a matter which is dripping in irony”, when one of the central issues in the probe is the Post Office’s “past non-disclosure to the criminal and civil courts”.

Kate Gallafent KC, for the Post Office, said the company “emphatically” denies any allegation that it has deliberately sought to make late or partial disclosure of relevant documents to the inquiry.

She said around 95,000 documents have been produced to the inquiry by the Post Office.

Taking the inquiry chair through what is expected in this second phase of the inquiry, Mr Beer referred to a briefing from the Treasury to the Prime Minister’s office dated April 1999.

He said it appeared from the contents of the document that it was “clear that some senior officials within the government were aware of technical issues with Horizon which called into question the integrity and robustness of Horizon”.

Addressing Sir Wyn, he said: “You, sir, will wish to explore how widespread this knowledge was within government and then what was done with that knowledge.”

Evidence in Phase Two will begin being heard on October 18 after all the opening statements have been completed this week.