Former Post Office minister Sir Ed Davey has apologised to campaigner Alan Bates for his letter about the government having an “arm’s-length relationship” with the organisation – which the ex-subpostmaster labelled “offensive”.

Mr Bates told the Horizon IT inquiry on April 9 that Sir Ed’s 2010 letter “appeared to be a standard template response”, describing it as “disappointing”.

Speaking to Sky News on Tuesday, the Liberal Democrat leader said he was “sorry for not seeing through the lies” during his time as minister under the coalition government between 2010 and 2012 – adding that they were on an “industrial scale”.

Questioned on whether he had anything to say to Mr Bates following the campaigner’s evidence to the inquiry, Sir Ed told the broadcaster: “Well, I’ve apologised to him already.

“What happened was, I was in office for 11 days and was asked whether I would meet him and I was told that the tradition had been that we didn’t meet people because the Post Office was run by Post Office executives, and it was an arm’s-length relationship.

“Then he wrote back to me, and the officials told me the letter was pretty tough, which it was, which we heard at the inquiry, and I agreed that I should meet him.

“So I was actually the first Post Office minister to meet him – he was an amazing guy as everyone now knows, and I put his concerns to Post Office executives.

“His main concern, as we saw in the drama and as we’ve seen in the inquiry, and indeed as we saw in the 2019 High Court case, was the Post Office were saying there was no remote access to the Horizon system, therefore the subpostmaster was responsible for the system.

“He was claiming that couldn’t be the case, so I put that very important IT issue to Post Office executives and to officials and they said no, there was no remote access at all.”

Sir Ed continued: “Now what’s so shocking, and this has come out through the inquiry, is that they knew all along there was remote access.

“So they must have lied to me, to previous ministers, to ministers after me – and they lied not just to the subpostmasters who were the victims of this, but to the courts, and the judges and the lawyers.

“So this was lies on an industrial scale and why I actually support people who say that the people who are responsible for this must be held to account – and if that means them being taken to court and going to prison, so be it.”

Sir Ed declined Mr Bates’ first request for a meeting in 2010, and a Civil Service briefing note shown to the inquiry recommended a meeting was offered following the campaigner’s second letter for “presentational reasons against the background of potential publicity”.

Mr Bates wrote back to the former postal affairs minister following his “arm’s-length relationship” comment, saying: “It’s not that you can’t get involved or cannot investigate the matter, after all you do own 100% of the shares and normally shareholders are concerned about the morality of the business they own.

“It is because you have adopted an arm’s-length relationship that you have allowed a once great institution to be asset stripped by little more than thugs in suits, and you have enabled them to carry on with impunity regardless of the human misery and suffering they inflict.”

When questioned by counsel to the inquiry Jason Beer KC on why he took offence at Sir Ed’s letter in 2010, Mr Bates said: “The government was the sole shareholder, they were the owners, as such, of all of this.

“How can you run or take responsibility for an organisation without having some interest in … or trying to be in control?”

Sir Ed told Sky News the Government’s system of an arm’s-length relationship with the Post Office was “wrong” and “broken”.

He said: “That system has to go – it is not acceptable that we have arm’s-length bodies … and why hasn’t the Government acted more quickly?”

Asked why he didn’t act at the time, Sir Ed said: “I did, I saw Mr Bates … and I was the first Post Office minister to see him, to be fair, and having seen him I put his questions.”

Pressed again on whether he had any embarrassment about the way he behaved at the time, Sir Ed said: “Well, yes, I feel that as someone who’s sorry for not seeing through the lies, and sorry for not seeing Alan Bates, I’m sure other people feel that as well.

“We wish we got to the bottom of this.”