Justice secretary forced to defend his plans against accusations that they are a 'corruption' of the British legal system

The justice secretary, Ken Clarke, has admitted to being "unsettled" by criticism from lawyers about his plans for extending secret courts.

Appearing before a parliamentary select committee, Clarke was forced to defend his plans against accusations that they were a "corruption" of the British legal system which undermined the tradition of open justice.

The justice and security green paper, put out for consultation by the Ministry of Justice, proposes using "closed material procedures" to prevent sensitive intelligence being revealed in civil courts for the first time. Claimants would not be able to see the evidence against them and ministers would be able to make initial decisions about material that should be withheld. In some cases the full judgments would not be published at the end of a civil trial.

The Conservative MP Richard Shepherd told Clarke he was very concerned about the integrity of the legal process, and described it as a "corruption" of the legal system. He said submissions by special advocates – who already appear in closed immigration appeal hearings – had described the green paper's proposals as "an assault on common law principles" and "inherently unfair". Clarke conceded: "Of all the responses, the evidence of the special advocates most unsettled me. I was surprised by their strong reaction. It's important we take on board their strong strictures."

The Liberal Democrat MP Mike Crockart said there was "distrust about the motives behind this green paper".

But the justice secretary said the measures were about protecting the public. He said public interest immunity certificates were inadequate because they prevented evidence being shown to court. Closed material procedures, he said, would allow evidence to be put before a judge even if a claimant were not allowed to hear it.

Clarke said: "There's no one more concerned about open justice than I am. We are trying to see how open justice can be done in very restrictive circumstances. We are talking about where relevant evidence could be given by our intelligence services, our spies – where there's covert surveillance of various kinds, and where the parties are often unaware.

"Such evidence can't be used in open court [but] is often pertinent to the outcome of civil proceedings and can't be taken into account by the judge. I think that's extremely unsatisfactory.

"Our intelligence services should be accountable as far as is practicable if they are accused of malpractice of some kind. If I was a citizen I would like to know what the outcome was.

"But it's plainly not the case in any democracy in the world that you can have the countries' spies appearing in court openly and giving evidence about their [activities] and the technology they have used – or the means by which they infiltrated a terrorist organisation they are shadowing."

When pressed Clarke gave few examples of cases where the government had had to settle because it could not present sensitive material to resist claims. He referred repeatedly to the Binyamin Mohamed case brought when the suspect had been released from Guantánamo Bay. The justice secretary also alluded to inquests in Northern Ireland that could not be completed because of disputes over security disclosures.

The parliamentary joint human rights committee was told there were an estimated 27 legal claims being prepared, presumably similar to the Mohamed case, that were likely to raise sensitive security issues.

James Brokenshire, the Home Office minister, said that there had been discussions with the intelligence services about the drafting of the green paper at early stages. Clarke insisted the green paper was a ministerial document drafted by civil servants. A white paper, fleshing out the details, is expected before the autumn.

The committee also heard John Wadham, legal director of the Equality and Human Rights Commission, call the green paper proposals "a fundamental departure from our common law principles", while Eric Metcalfe, a barrister specialising in human rights law, warned its members that any attempt to limit the proposals to cases said to involve national security could still see a very large number being heard behind closed doors.

An emergency motion is being put to this weekend's Liberal Democrat conference, expressing concern over the expansion of "secret justice". It is being supported by John Hemming MP and Sarah Ludford MEP.

Responding to Clarke's words, Clare Algar, legal director at the charity Reprieve, said: "At last it seems that the message is starting to get through to the government – that plans for a vast expansion of secret justice are deeply unfair.

"But it isn't enough just to be unsettled – it's time actually to act on the warnings of the people who know these processes from the inside, and who say they are fundamentally unfair.

"The government's proposals would effectively put politicians and their officials above the law, while excluding the public from their own legal system.

"We hope ministers will now see sense and drop these proposals before they wreck Britain's centuries-old tradition of open justice."

Isabella Sankey, Liberty's director of policy, said: "It's no surprise that having started with such sweeping proposals the government now hints at concessions. But minor nips and tucks won't make this chilling policy palatable.

"Secret courts for national security cases would have left CIA kidnap and torture victims locked out of their own civil claims and excluded bereaved relatives from the 7/7 inquest.

"The lord chancellor seeks to assure everyone that new laws will never be misused. No doubt that's what Gary McKinnon and others facing instant extradition thought was the case in 2003."

A number of submissions made to the government during the consultation process that followed publication of the green paper have not been published, and the Cabinet Office is refusing to identify the organisations or individuals that have submitted them.

One of the unpublished submissions is thought to have been made by Scotland Yard, and two have been made by unidentified private companies.