He (Vernon Kell) made full use of his linguistic talents in the Army when, as a captain in the South Staffordshire regiment, he studied Russian in Russia and Chinese in China, passing his examinations as an interpreter in each language. He saw service in the Boxer Rebellion in China and had been Intelligence Officer on General Lorne Campbell's staff in Tientsin. Ill-health interrupted his military career and, four years after being made a staff captain in the German section of the War Office in 1902, he was retired from the Army, but given the job of organizing from scratch M05, which later became M15. A lesser man than Kell might have lost heart in the first six months of this job. He was told to keep expenses down and, when he asked for a clerk, there were immediate protests. Eventually he was given one assistant and gradually he produced a mass of impressive reports which showed that Britain urgently needed a strong counter-espionage unit.

Kell's greatest initial success was in winning the cooperation of the police and working effectively with Scotland Yard. He frequently travelled to distant parts of the country to make personal investigations. Quickly he discovered that the biggest obstacle to spy-catching was the outdated Official Secrets Act. He pointed out to the War Office that in case after case Germans had been found gathering information about ships, factories and harbours, but that nothing could be done to check this because in law the spies were committing no offence. Vigorously he pressed for changes in the law, which ultimately were made. He also applied to the Home Secretary for permission to intercept the mail of suspected German spies, and it was as a result of this that a barber known as Karl Gustav Ernst living in the Caledonian road was discovered to be acting as a "post office" for the German espionage machine.

Gradually Kell won his battle to expand M15, and he began to chalk up some successes. The barber was trapped and caught and in 1911 an officer of the German Hussars was arrested at Plymouth. By the eve of World War I he had found an extensive German spy network in Britain and his staff had been increased to include four officers, one barrister, two investigators and seven clerks. M15's offices were transferred to the basement of the Little Theatre in John Street, off the Strand. As a result of the hard work put in by this small unit, when war was declared in 1914, twenty-two German spies were rounded up in Britain and arrested within a single day. This meant that for the best part of a year Germany had no effective spy service in Britain. The following year a further seven spies were caught and from then on M15's future was guaranteed. From 1906 to 1939 Kell remained in charge of the organization, a service record unsurpassed in modern times.

The troubles in Ireland occupied Kell's time in the years immediately after the war. Later the threat of subversion from Soviet sources became the major problem. By the time World War II began, Kell had achieved the rank of Major-General and supervised a staff of nearly 6000. He had not only infiltrated the Communist and Fascist ranks in Britain, but had most effectively penetrated the organization which was handling recruitment for the Spanish Republican Army. The result was that when war broke out again, some 6000 people were rounded up and interned as suspects, though only thirty-five of these were Britons. Early in 1940 Kell was forced to resign owing to ill-health, having carried on indomitably for many years, despite suffering which would have defeated a lesser man.

Cannot do any work in office. Been here five weeks, not yet signed my name. Absolutely cut off from everyone while there, as cannot give my address or be telephoned to under my own name. Have been consistently left out of it since I started. Kell has done more in one day than I have in the whole time...

The system has been organised by the Military, who have just had control of our destinies long enough to take away all the work I could do, hand over by far the most difficult part of the work (for which their own man is obviously better suited) and take away all the facilities for doing it.

I am firmly convinced that Kell will oust me altogether before long. He will have quantities of work to show, while I shall have nothing. It will transpire that I am not a linguist, and he will then be given the whole job with a subordinate, while I am retired - more or less discredited.

Called on Kell at his request handed over my small safe and the keys to my desk to his Clerk... He asked me if I should object to his coming next door, but t told him that I thought it would interfere with my privacy in my own flat and I begged he would not go forward with any such scheme. I would rather he were not in this immediate neighbourhood at all.

Colonel Kell said that it had occurred to him that Parliamentary opposition to the Secret Service vote would be greatly reduced if he were to take the Labour Members into our confidence to the extent of showing some of the most prominent of them a little of the work which had been done during the War. He could easily let them see many parts of his work which were not really very secret, but which were impressive as showing good results. He thought that this would help, not only to make them interested in the continuance of the work, but would also tend to dispel the feeling which appeared to be prevalent in many quarters that Secret Service funds were used to spy upon Labour in this country.

Despite statements to the contrary in the press and elsewhere, Sir Basil Thomson's organization has never actually detected a case of espionage, but has merely arrested and questioned spies at the request of MI5, when the latter organization, which had detected them, considered that the time for arrest had arrived. The Army Council are in favour of entrusting the work to an experienced, tried and successful organization rather than to one which has yet to win its spurs.

Sir Basil Thomson's existing higher staff consists mainly of ex-officers of MI5 not considered sufficiently able for retention by that Department. The Army Council are not satisfied with their ability to perform the necessary duties under Sir Basil Thomson's direction, and they are satisfied that detective officers alone, without direction from above, are unfitted for the work.

With the world in its present condition of extreme unrest and changing friendships and antagonisms, and with our greatly reduced and weak military forces, it is more than ever vital to us to have good and timely information. The building up of Secret Service organisations is very slow. Five or ten years are required to create a good system. It can be swept away by a stroke of a pen. It would in my judgment be an act of the utmost imprudence at the present time.

One MI5 officer, Captain (later Major) Herbert "Con" Boddington, had, however, succeeded in joining the Communist Party of Great Britain (CPGB) in 1923 on Kell's instructions. On entering MI5 in 1923 at the age of thirty, despite being wounded in the war, Boddington had listed as his recreations "All outdoor games. Principally boxing, rowing and running." Unusually for an MI5 recruit, however, he had added: "Can act. Have played light comedian [sic] both at home and abroad." Boddington also claimed "literary experience", which included writing stories for silent films." At least some of these skills were probably of assistance in passing himself off as a Communist.

Kell's search for informants to compensate for his post-war lack of an agent network led him to co-operate with Sir George Makgill, a businessman with ultra-conservative views and a deep-seated dislike of trade unions. At the end of the war, with the support of a group of like-minded industrialists, Makgill set up a private Industrial Intelligence Bureau (IIB), financed by the Federation of British Industries and the Coal Owners' and Shipowners' Associations, to acquire intelligence on industrial unrest arising from subversion by Communists, anarchists, the Irish Republican Army (IRA) and others. From an early stage Makgill was in contact with Kell, who claimed that he had helped Makgill found "an organisation of a secret nature somewhat on Masonic lines" - probably a reference to the IIB. (Unlike Kell, Makgill and his son Donald were both prominent Freemasons.) Before joining MI5, Boddington had worked for the IIB and remained in touch with, notably, Makgill's agent, "Jim Finney", who, like Boddington, succeeded in joining the CPGB.

It is becoming increasingly clear that at Olympia Mosley suffered a check which is likely to prove decisive. He suffered it, not at the hands of the Communists who staged the provocations and now claim the victory, but at the hands of Conservative MPs, the Conservative Press and all those organs of public opinion which made him abandon the policy of using his "Defence Force" to overwhelm interrupters.

As a secret organization MI5 could not publicly claim credit for its part in the capture of German spies. The more flamboyant Thomson, already well used to publicizing his achievements, could and did. In the process he earned the collective enmity of most of M15. Reginald Drake, head of counter-espionage in MI5 until 1917, wrote later to Blinker Hall: "As you know B.T. did not know of the existence, name or activity of any convicted spy until I told him; but being the dirty dog he was he twisted the facts to claim that he alone did it." There was, inevitably, some overlap in the activities of MI5 and the Special Branch which added further to the rivalry between them. Eddie Bell, who was responsible for intelligence liaison at the US embassy, wrote after the war that when the embassy wished to make inquiries about people claiming American citizenship arrested on suspicion of being German spies "it became almost a question of flipping a coin to decide whether application for information should be made to Scotland Yard, the Home Office or MI5." Blinker Hall had much greater sympathy for the flamboyant Thomson than for the retiring Kell. Bell reported "considerable jealousy between the Intelligence Department of the War Office and the Admiralty, the latter affecting to despise the former, particularly MI5, whom they always described as shortsighted and timorous... While Thomson enjoyed the limelight, Kell shunned it. His only known publication is a letter to a newspaper on the behaviour of the lapwing.

In the later stages of the war, Thomson was to emerge as the most formidable rival encountered by Kell in his thirty-one years as director. In the power struggle which ensued, Kell's Bureau became a victim of its own successes. Had German espionage remained a serious apparent threat throughout the war or Germany succeeded in launching a major sabotage campaign in Britain, Kell would have found it much easier to retain the lead domestic intelligence role. But during the second half of the war, with government now more concerned with subversion than with espionage, it was easier for Thomson than for Kell to gain the ear of ministers.

The reason for the friction is almost impossible to fathom but Kell undoubtedly mistrusted Churchill, perhaps it went back to Churchill's attempts to merge M15 and SIS in the Twenties. Kell once claimed to have refused a pre-war request for intelligence information from Churchill but that is unsubstantiated. It could, however, be argued that because Desmond Morton had had to rely on Maxwell Knight for "situation reports" he was obviously not obtaining them from the horse's mouth.

Certainly it had been a bad twelve months for M15 and they had come in for more than their fair share of criticism. Two particular incidents had attracted an embarrassing amount of adverse press coverage even though, like the sabotage of Oleander, War Afridi, HMS Cumberland and L-54 before the war... they had nothing to do with M15. As before they were concerned with the Royal Navy but some felt that Churchill might have marked them all down as Security Service blunders and as further examples of their inefficiency.

The first incident thought to have broken Churchill's patience was the audacious German attack on Scapa Flow on 14 October, 1939. The loss of the Royal Oak with 834 hands was a savage blow to the morale of the country and the Navy. For quite unjustified reasons M15 were blamed for much of the Admiralty's incompetence. A U-boat captain named Gunther Prien succeeded in picking his way through the anti-submarine defences around the Navy's refuge in the Orkneys and proceeded to select an enviable target. The Admiralty held an enquiry and NID sent sleuths up to Kirkwall to investigate rumours of German spies, but failed to get any evidence. The results of the official enquiry were eventually published and it was obvious that the local precautions against an underwater attack were negligently inadequate.

On the day after the disaster a blockship arrived at Scapa Flow. It was to have been sunk in the narrow channel negotiated by U-47 the previous afternoon. A long delay occurred before the Admiralty were even sure that the Royal Oak had been sunk by a submarine. Sabotage was a popular theory. No one ever denied that espionage was at the bottom of it all so journalists had a field-day. After the war several accounts were published of a mysterious Nazi watchmaker who had vanished from his shop in the Orkneys the day of the attack! It was, of course, all eye-wash, though to their credit M15 did turn up a suspicious Italian photographer who ran a camera shop in Inverness. There was nothing to suggest that he was in any way connected with the disaster at Scapa Flow but he was interned anyway.

The second incident that gave M15 a bad press was an explosion in Churchill's constituency at the Royal Gunpowder factory at Waltham Abbey in January 1940. Sabotage was rumoured and Chief Inspector William Salisbury, later of the Murder Squad, launched an investigation. His conclusion, with which the M15 counter-sabotage unit and Detective Chief Inspector Williams of Special Branch agreed, was that none of the three explosions which occurred on 18 January and killed five workers were caused by sabotage. The announcement of their findings received very little coverage compared to the headlines that the incident provoked at first. The investigation left the First Lord of the Admiralty unimpressed.

Whatever the background, the circumstances of Kell's abrupt dismissal are clear. He was summoned to Sir Horace Wilson's office on Monday, 10 June, and left, a broken man, a short time later. Kell broke the news to his Deputy D-G, Eric Holt-Wilson, the same evening at his club, and promptly received his resignation. That night Kell made this bitter entry in his personal diary: "I get the sack from Horace Wilson, 1909-1945."

Officially retired in 1923 and confirmed in that year by the London Gazette, Kell now genuinely relinquished a post he had held since 1909. There was no obvious successor so Brigadier Harker, the Director of `B' Division, was promoted Deputy D-G with the rank of Acting Director-General. In his place Guy Liddell was appointed Director of "B", a post he was to hold until 1947.

In fact the real power of MI5 was soon to be invested in the Security Executive, the recently formed Home Defence Executive off-shoot. Churchill's choice for Chairman was Lord Swinton, previously Sir Philip Cunliffe-Lister and Chamberlain's Air Minister. His powerful committee was established in great secrecy in Kinnaird House, Pall Mall, and Sir Joseph Ball, another senior figure in the Conservative Party, was appointed Deputy Chairman. The Security Executive was also served by two Joint Secretaries, William Armstrong (later Lord Armstrong), a civil servant from the Board of Education, and Kenneth Diplock (now Lord Diplock), an Oxford-educated barrister.