Scotland Yard has been accused of covering up intelligence that could have been of vital importance to the Leveson inquiry which allegedly claims that a very senior police officer was leaking information to the News of the World.

A year after a series of current and former Metropolitan police commissioners gave evidence to the inquiry, Robert Jay QC, counsel to the inquiry, confirmed that Scotland Yard had claimed "public interest immunity" in relation to the internal intelligence report, written in 2006.

Asked why he did not question senior Met police who gave evidence to the inquiry, which included former commissioners Lord Stevens, Lord Blair and Sir Paul Stephenson and other senior Met officers, about this matter, Jay said the inquiry was not shown the police report until after they had given evidence.

According to Monday's London Evening Standard the classified document suggested the officer — who is not named for legal reasons — passed the leak on to the tabloid for money.

Tom Watson, the Labour MP and one of the most high profile critics of the News of the World at the height of the phone-hacking scandal, called on Met commissioner, Bernard Hogan-Howe, and the home secretary, Theresa May, to "urgently review" what happened.

He said: "People may have forgotten there is supposed to be a part two to the Leveson inquiry. This strengthens the argument for the second part to be held after the trials [of former News of the World staff].

"It's very clear that an intelligence document exists that should be significant in showing the relationship between very senior officer at the Met and executives at News International and I think the home secretary and the commissioner should review the file. If they have nothing to hide they should release it."

The inquiry into press ethics started in November 2011 and held evidence-gathering hearings for nine months, devoting an entire module, lasting several weeks, to examining the relationship between the press and the police.

When Lord Justice Leveson finally published his report last November, he criticised the Metropolitan police for errors in its handling of the phone-hacking scandal and for fostering a "perception" that some senior officers were too close to News International. He said "decisions made in the period 2006-2010 can be characterised as insufficiently thought through … wrong and unduly defensive".

Jay, who is poised to become a high court judge, confirmed that the report was not submitted by Scotland Yard until 23 April last year. This was seven weeks after Stevens, Blair, Stephenson and other senior police officers were quizzed by Leveson.

In a statement Jay said: "The Metropolitan Police Service is claiming public interest immunity in relation to any police intelligence report, the contents of which are neither confirmed nor denied."

He added had the inquiry had a continuing "obligations of confidence" to the police in relation to their submissions. "These factors have at all stages limited what I am able to place in the public domain, and continue to do so," he said.

That the Met was apparently able to gag Jay and Leveson will raise fresh questions about the inquiry's ability to deliver David Cameron's demands when he launched the inquiry in July 2011 at the height of the phone-hacking scandal and following the revelations that murdered schoolgirl Milly Dowler's phone messages had been intercepted by the News of the World.

At the time he told the Commons that what the country needed "to confront is an episode that is frankly disgraceful, accusations of widespread law-breaking by parts of our press; alleged corruption by some police officers; a failure of our political system over many, many years to tackle a problem that's been getting worse".

Jay said he had his hands tied in relation to the contents of the intelligence report. He said the Met "first provided me with a copy of a police intelligence report on 23 April 2012", which he said was well after senior officers had testified.

In a statement, Jay said he had received confidential information from at least two sources, including the MPS, in relation to the alleged leak but at the time had not been shown the police report.

The intelligence report was written in 2006, the year it first emerged that at least one reporter on the News of the World was engaged in phone hacking.

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