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The Guardian’s current sleek glass-walled London offices give little hint of the paper’s nonconformist Manchester origins back in 1821. But the lobby does have a bust of a formidable bearded figure; this is CP Scott, legendary editor for 57 and a half years. His famous dictum ‘comment is free, but facts are sacred’ is still the Guardian’s animating principle.

Inspired by CP Scott’s tough-mindedness, editor-in-chief Alan Rusbridger had handled some big leaks in the past, of which WikiLeaks had been the most recent and famous. But this one was without precedent.

British journalists do not enjoy the constitutional free speech protection of their US counterparts. There is also a strong cultural understanding in the US that journalism has a key function in society. Although this can lead to establishment-minded behaviour sometimes, it has also made possible a tradition of investigative reporting in the spirit of Watergate, when two young Washington Post journalists brought down President Nixon in the 1970s.

Britain, by contrast, has a repressive culture of state secrecy. At the very moment Woodward and Bernstein were being fêted in Washington for their Watergate disclosures, some young journalists in Britain wrote an article called ‘The Eavesdroppers’. It revealed for the first time the mere existence of GCHQ as a British radio spying agency. They were promptly had up and convicted at the Old Bailey under the Official Secrets Act. One, a US citizen named Mark Hosenball, was deported without a right to trial as a purported ‘threat to British national security’.

Against this history, the challenge of publishing top-secret GCHQ documents in a British paper was a sizeable one.

The Official Secrets Act, passed amid fears of German espionage in 1911 and updated in 1989, makes it a crime for British officials to leak intelligence information. But it also has clauses that potentially criminalise journalists. While there is no specific public interest defence so the Guardian’s editor could be caught by provisions that make it an offence to publish intelligence information, such a disclosure has to be deemed damaging. The only arguable defence would be that the published article was not in fact damaging or, at any rate, not intentionally so. Police moves could therefore be just round the corner.

Mere possession of the Snowden files in London could also lead to a civil gag order, if the British government got to hear about their presence. The files were undoubtedly highly confidential and, while unlikely to identify James Bond-style undercover secret agents, they were certainly the property of the government. National security was at stake.

Under the UK’s law of confidence, a judge could quite possibly be persuaded to grant a government request for an immediate injunction banning all publication of such material, and demanding the files’ return. The paper could challenge this through the courts, by arguing there was a public interest in what it was disclosing. But at best, the case could embroil Rusbridger in a lengthy, uncertain and costly legal battle. In the meantime the paper would be unable to report on any of the documents’ contents. An injunction would therefore be a journalistic disaster.

Hunkered down the next day with prominent media QC Gavin Millar, Rusbridger considered his legal options. The 100 per cent safe course was to destroy all the UK files at once. Another safe alternative was to hand the files to a security-cleared politician and call for an inquiry into their contents – the obvious recipient was former Conservative foreign secretary Malcolm Rifkind. He now chaired the notoriously weak parliamentary intelligence and security committee which was supposed to oversee bodies such as GCHQ. Rifkind would probably hand the files straight back to the spies themselves, unread.

Millar’s advice was one thing. But Rusbridger also had to take into consideration his obligations towards Snowden. Snowden ‘had risked his life to get hold of this stuff’, the editor felt. Furthermore, Snowden had given the material to the Guardian because he believed Congress couldn’t be trusted. The special US courts that dealt with intelligence matters met in secret. Only a newspaper could begin the debate he wanted. And it couldn’t take place if the public remained clueless as to the extent of the state’s suspicion-less surveillance.

‘Of all the journalist ethical dilemmas you have to face in life, it was a fairly big one,’ Rusbridger says.

He decided to ask some trusted staff to make a detailed study of the files. The data-set was unwieldy. A few documents were obviously sensitive. But the majority were confusing and corporate: PowerPoints, training slides, management reports, diagrams of data-mining programs. Much was unclear, although it was evident that GCHQ’s technical capacities and sheer ambition were very great. And that GCHQ’s ‘special relationship’ with its sister organisation the NSA went surprisingly deep.

The Guardian team set up a small ‘war room’ and were tough about security. A guard was posted 24 hours a day on the corridor to check IDs against a highly limited list. All phones were banned: a row of BlackBerrys and smartphones sat on a table outside with their owners’ names on yellow Post-it notes. The windows of the bunker were papered over. All the computers were new. None had ever been connected to the internet or any other network – a precaution against hacking or phishing attacks. They were to remain ‘air-gapped’ throughout.

Multiple passwords were needed to log in; no staff member knew more than one password. Work was written and saved on USB sticks; nothing went on the network. In the corner an air-conditioning unit gave off a low hum. There was also a shredder.

Without natural light and strictly off-limits to cleaners, the bunker soon became frowsty. ‘It smells like a teenage boy’s bedroom in here,’ said one visitor.

Posted onto a whiteboard was a memo from Rusbridger: ‘Edward Snowden approached the Guardian because he says people have no idea of the extent of what he regards as the surveillance state. He argues that technology has run ahead of the law or the ability of anyone – citizens, courts, press or Congress – to have meaningful oversight of what is happening. This is why we have the documents.’

The memo added: ‘We should search for material relevant to these concerns which are of high public importance. We are not engaged in a general fishing expedition.’

The team interrogating Snowden’s material was made up of trusted senior journalists. It included Nick Hopkins, the Guardian’s defence and security editor, data editor James Ball, veteran Nick Davies and Julian Borger, who shuttled between London and New York. Greenwald in Brazil was lead reporter. MacAskill operated out of the US.

Having the material was one thing, making sense of it another. At first the reporters had no idea what ‘strap one’ and ‘strap two’ meant. It was only later they realised these were classifications beyond top secret. Greenwald had given MacAskill one helpful clue – look for a program called TEMPORA. On day one the team stayed until midnight, returning the next day at 8am. The process became easier when TEMPORA led them to GCHQ’s internal ‘Wiki’, which Snowden had uploaded. Mostly, it was written in plain English.

Soon the board was covered in the codenames of NSA/GCHQ programs – SAMUEL PEPYS, BIG PIGGY, BAD WOLF. The early stages of document analysis were heavy-going. ‘The documents were seriously technical, fantastically dull and utterly brilliant,’ Hopkins says. Hopkins would shout: ‘What does QFD mean?’ Someone would answer: ‘Query-focused database.’ And what’s a ‘10gps Bearer’? Or MUTANT BROTH? MUSCULAR? EGOTISTICAL GIRAFFE? And so on.