Speculation rife as telco leak caught

The public servant responsible for leaking the commercially explosive Budget paper on Telecom has been identified and suspended from work.

The person is expected to be sacked soon but is likely being given time to formally offer an explanation.

An inquiry is being undertaken by the State Services Commission and commissioner Mark Prebble said yesterday that in his judgment there was "no continuing risk for the security of Government information."

"I understand employment action has now been initiated in relation to this event."

Dr Prebble won't name the culprit but prominent Auckland employment lawyer Peter Kiely is thought to be representing the person.

Dr Prebble said he was expecting to release the report of the inquiry before the Budget on Thursday, possibly as early as Monday.

"I would like to thank the various parties, including Telecom, for their swift co-operation with the investigation process," he said.

Telecom is thought to have told the State Services Commission the name of the leaker.

The National Party is pointing the finger at the Beehive, and the Beehive is pointing the finger at Government departments - the Treasury, the Ministry of Economic Development and the Ministry of Justice were prime suspects.

The Cabinet paper outlined what was intended to be the centrepiece of next week's Budget - plans to open up Telecom's network to competitors, aimed at getting faster broadband services.

Telecom advised the office of Communications Minister David Cunliffe that it had the document, the announcement was brought forward two weeks and $1.8 billion was rapidly wiped off the value of Telecom's shares.

The Securities Commission yesterday announced it would be undertaking its own inquiry into whether the forced release of the Cabinet paper "affected the transparent and orderly functioning of the securities markets".

Telecom chief executive Theresa Gattung said the company would co-operate with the inquiry.

She denied that Telecom had in any way sought such confidential information on the Government's plans.

Neither she nor Telecom's public affairs manager John Goulter would say who had given Telecom the document. Prime Minister Helen Clark said she did not know who it was and was leaving the matter to the State Services Commission.

Mr Goulter is one of many former Beehive staffers who have gone on to work for Telecom.

He indicated last night that such transitions were natural.

"People are hired on the basis of their skills and it would be highly unethical of them to use information they had acquired in one workplace and pass it on to another."