10 DOWNING STREET
                                                            LONDON SW1A 2AA

THE PRIME MINISTER                                               10 December 1998

Dear Austin,

Thank you for your letter. of 26 October in which You requested that the Government publish the Price Waterhouse report on BCCI known, as "Sandstorm".

As Alistair Darling explained in his letter of 22 July, the report was commissioned by the Bank of England, under section 41 of the Banking Act 1987.  It is therefore covered by the confidentiality provisions in Part V of  that Act.  The work was undertaken, and the contributions obtained, on the clear understanding that the report would not be made public.  The result of any litigation concerning BCCI does not alter this understanding.

The position concerning the disclosure of information in such circumstances is     set out in the Code of Practice on Access to Government Information (Point 14 of the exemptions to the principle of disclosure ) which governs current practice. This position is retained under the proposals in the Freedom of information White Paper 'Your Right To Know', as the last of the six proposed specified interests governing disclosure.

You suggested that release of the Sandstorm report would be tangible proof of our commitment to freedom of information.  As we said in the White . Paper, it is important to protect information supplied in confidence, where there was an explicit undertaking of confidentiality, or at least a reasonable expectation that the law of confidentiality applied.  This was clearly the case with the Sandstorm report, given its origins under Section 41 of the Banking Act.

                                                    Yours ever


Austin Mitchell Esq MP