The chairman of the Horizon IT inquiry engaged in a tense exchange with a former Post Office investigator after the probe was told he believed a subpostmaster’s complaints about the faulty system were “unfounded”.

Sir Wyn Williams asked Robert Daily “how does that square with your duty to investigate lines of inquiry which are raised before you?” after the former investigator said it did not cross his mind that a subpostmaster’s loss could have been generated by a computer.

On Tuesday, Mr Daily said the Post Office “constantly” told investigators that the Horizon system was “robust”, but said he could not remember when he was first given the messages by his bosses.

The witness said he carried out a search of Newcastle subpostmaster Peter Holmes’ home and car before interviewing him because that was “expected” in line with Post Office policy.

Mr Holmes was investigated for an alleged £46,000 shortfall at his branch in Jesmond and, after pleading guilty to false accounting, was sentenced to a community order and curfew.

He died from a brain tumour in 2015 – six years before his conviction was quashed by the Court of Appeal.

An investigation document, shown to the inquiry, showed that Mr Daily had said of Mr Holmes’ complaints about Horizon in 2008: “This has been checked and the allegations are unfounded.”

Mr Daily was asked by Christopher Jacobs, a legal representative for subpostmasters including Mr Holmes’ widow Marion Holmes, whether he accepted any personal responsibility for what happened to Mr Holmes, to which he replied: “No, I was only doing my job”.

Mr Daily was also questioned by Mr Jacobs over his claim that he did not know about issues with Horizon while investigating the Newcastle subpostmaster.

Mr Jacobs said: “What I have to say to you is that Mrs Holmes and a number of my other clients simply don’t believe that.

“We can’t accept that you had no idea that other subpostmasters or systems had problems with the Horizon system, and were raising those.”

Mr Daily replied: “I can only tell you that when Mr Holmes brought up Horizon in an interview with myself, from what I recall, that’s the first time I heard someone bring it up in an interview.

“I wasn’t aware of all the other cases that were going ahead, I don’t even know half of these people, or most, or all of these people that have been mentioned here or in this inquiry. It was never fed down to us.”

Mr Jacobs continued: “Quite a few people have come to give evidence to the inquiry who were Post Office investigators and they’ve said there was a message from above: ‘this issue might come up, subpostmasters might raise Horizon points, but the message from the business is that the system is robust’ – do you recall that at all?”

Mr Daily replied: “Constantly.”

Mr Jacobs went on: “So what you’re saying is that you were told constantly that subpostmasters would raise these issues, but this was the first one that you were involved in where issues were raised?”

The Post Office witness responded: “I can’t recall when the Post Office started telling us there were issues with Horizon – I couldn’t honestly give you the first date I was aware of it.”

Addressing the searches conducted at Mr Holmes’ address, Mr Jacobs said: “Was it normal to go into people’s homes, go into their bedrooms and their drawers and take out statements from banks before a postmaster or assistant had been interviewed, Mr Daily?”

Mr Daily replied: “If you’re asking me if I was comfortable doing that, no I wasn’t comfortable but it was part of the job and it was done voluntarily.”

He said it was “expected” that investigators would carry out a search first before conducting an interview.

Interjecting in Mr Jacobs’ line of questioning, the inquiry chairman said: “As it happens Mr Daily, your evidence about the searches and investigations you conducted to, as you then thought and as you’ve told me, discover where the money was, they were quite thorough and yet you found nothing.

“In light of that, did that not give added credence to Mr Holmes’ suggestion that this was generated by the computer as opposed to being real?”

Mr Daily replied: “Not at the time, sir.”

Sir Wyn continued: “Right, just didn’t cross your mind as a possibility?”

The Post Office witness said: “Not at the time, sir.”

The inquiry chairman went on: “But how does that square with your duty to investigate lines of inquiry which are raised before you?

“Did you think it was so fanciful that it wasn’t even worth bothering to look at it?”

Mr Daily said: “No that wasn’t the case, sir.”

Sir Wyn then asked: “No – so what did you do in the absence of any success in discovering the whereabouts of the money, what did you do to investigate whether in fact there had been a loss?”

After a long pause, the chairman added: “I think silence…”

Mr Daily interjected: “I’m not really sure how to answer that, sir.”

Sir Wyn then said: “Well, did you do anything?”

Mr Daily responded: “Yes, we interviewed Mr Holmes, he admitted to false accounting.”