Counsel for the inquiry, Blake, continues to press Davies on on whether Post Office strategy was being driven by the communications team under his helm.

He pulls up a number of email exchanges he says show Davies attempting to divert attention away from the Second Sight report, adding that the former executive has decided the emphasis should be on the lack of training and support sub-postmasters received rather than the Horizon system.

In response, Davies says he does not agree and that the lack of support and training raised in the report was "concerning" and "really, really shocking".

Communication was my "bread and butter", he says, adding that he was also a senior executive looking at the broader picture.

Blake now turns to an email that Davies wrote to Vennells which details a media request from the Daily Telegraph, asking if the Post Office will apologise to sub-postmasters.

Davies says he didn't feel an apology was needed as there was no final report yet in July 2013 and to issue a blanket apology would "not be the right course of action".

Were you advising Paula to not apologise, Blake asks.

"Yes," Davies confirms.

Blake expands on this line of questioning about waiting for a final report before considering a possible apology.

He asks Davies if he was hoping to influence the final Second Sight report, essentially to water it down.

"Not remotely," Davies says.

Was there any genuine attempt to assist Second Sight? Blake asks, to which Davies says "absolutely", adding that he didn't deal with them directly.

Image source, Post Office Inquiry

Blake is turning to an email from Davies about the Horizon report, and the subsequent media coverage.

The email details the Post Office's decision to turn down an interview request from BBC because this could "give the media a "new line".

Blake once again returns to this morning's question: Do you think that that's part of an open culture?

Davies insists minimising negative media coverage of the report was "what my job was about".

Was it appropriate for the BBC legal team to be contacted by external lawyers to change headlines, Blake presses.

Where headlines misleading, yes, Davies says.

For context, lawyers for the Post Office sent letters threatening to sue Panorama, and Davies escalated complaints to ever more senior BBC managers.

A letter from Paula Vennells, the former Post Office chief executive, in response to the Second Sight report is being shown to the inquiry.

In it, she asks her chief of staff about the next steps the Post Office should take, including whether there should be an external review of past prosecutions against sub-postmasters.

An email in response to this letter from Mark Davies to her chief of staff is then shown, where he suggests there is a "danger here of going way too far".

Counsel for the inquiry, Blake, puts to Davies that this is evidence of him trying to direct a response relating to the report - and "formulate a response which is less than that of Paula Vennels" in regards to the suggestion to review prosecutions.

Davies rejects this assertion, explaining that he does not recall what he meant by this email.

He adds that he would have believed reviewing criminal cases was an "extremely good idea".

The inquiry is now seeing emails from July 2013 between Davies and Paula Vennells, who was the Post Office's chief executive at the time.

The emails show Davies saying the Horizon system has been cleared as a result of the Second Sight report.

Blake questions Davies on this conclusion, to which Davies says it was because preliminary findings showed there were no systemic issues.

Image source, Post Office Inquiry

An email exchange with Susan Crichton and others at the Post Office has been pulled up, showing Davies discussing a draft letter on the Second Sight review.

Blake zooms in on a section where Davies says he's keen to keep working with Second Sight, the independent forensic accountants.

A discussion about the "exceptions" is being shown to the inquiry.

Earlier today we told you the inquiry heard the the Post Office adopted the term "exception" to describe bugs in Horizon's system.

"I know you object to the word 'spin'", Blake says, but do you think that this is an "accurate description of the bugs?"

Davies says that it does not.

Davies is then asked if the Post Office's position would be the one set out in the press release.

He tells the inquiry that if the draft statement being shown is in fact the final one that was released, it was wrong and he takes "full responsibility".

But in terms of the broader company position, he maintains the Post Office had no indication from the six million transactions each day there were any issues with Horizon.

Counsel for the inquiry, Blake, puts to Davies that the communications team, led by him, was developing the corporate strategy - the "rocks to rely upon", as he puts it.

Davies, in response, says this is not the case. He explains that the communications team like in any company has a "significant part to play" in the development of a position.

The team's job, he says, would be to make suggestions, both strategic and tactical, on any external communications, but it does not mean the team operates separately from the business.

Ali Abbas Ahmadi
Reporting from the inquiry

A feisty exchange between Julian Blake and Mark Davies.

Blake is comparing an interim report by Second Sight to a draft Post Office press release about the report.

"There are points [in your statement] that are actually just wrong, aren't there?" Blake asks.

"Yes," replies Davies eventually.

Someone scoffs in the room.

Blake proceeds to go through the report, asking whether some key points made in the Second Sight report - such as that it was a preliminary, or that it referenced "bugs" - were reflected in the Post Office statement.

"No," replies Davies.

Another scoff.

"Did you think it was appropriate to lie in the way that you have in the press release?" Blake challenges.

"I don't think I've lied there," Davies says, his voice rising slightly.

If I'm guilty of anything there, it's of "being sloppy," he adds defensively. "I've never lied in my entire career."

More scoffs.

Image source, Post Office Inquiry

The draft Post Office press release and the Second Sight report are continuing to be shown side-by-side to the inquiry. Davies, who authored the release, says this was meant to be a summary of the report.

Blake points out he has "already acknowledged that it was inaccurate".

Davies says that this was a draft, and hopes the errors had been corrected.

Blake replies "You're trying to put a positive spin on the report. There are points that are actually just wrong aren't there?"

"Yes," Davies replies.

Counsel for the inquiry, Blake, is taking Davies through a draft statement by the Post Office relating to the Second Sight report.

Second Sight were the independent forensic accountants appointed by MPs in 2012 to investigate allegations that Fujitsu's Horizon software was producing anomalies in branch accounting, leading to shortfalls.

The statement from the Post Office details how the Second Sight report found "no systemic issues" - but the actual report from the fraud investigators details multiple instances of defects.

Davies tells Blake he believed he would have read the report at the time, and admits that the Post Office statement "appears to be inaccurate" and inconsistent with the actual report.

Emma Simpson
Business correspondent

In his witness statement, Mark Davies painted a glowing picture of the Post Office senior leadership team and his colleagues in the press team

Any concerns the system didn’t work properly were taken extremely seriously, he says.

But Julian Blake, counsel to the Inquiry, has spent the morning challenging Davies on just how open the business was to dealing with the emerging Horizon scandal.

He’s been shown some of his internal emails on how he responded to the unfolding crisis.

They haven’t aged well.

Davies said they looked "ludicrous" in hindsight.

It wasn’t the perfect approach to comms and that he’d made many mistakes. He keeps insisting he was acting in good faith and appropriately based on the context of what they knew at the time.

Counsel for the inquiry Blake goes back to discussing the report by independent forensic accountants Second Sight. He refers to a document where Davies maps out the communications strategy - which includes a plan A and plan B - to respond to the report.

On "Plan B", the email says they should consider "rebuttal and tactics". Blake asks was plan B's aim to rubbish the report's findings?

"That's absolutely not correct," Davies says.

Davies says his team was tasked with developing a press release based on the report and press officers would have collaborated with other parts of the business such as legal, IT, etc.

Blake presses Davies on this point, saying that at the board meeting, Davies was specifically asked to deal with the response to the report.

Davies disagrees, saying that he was simply asked to draft a media response and it was not to persuade Second Sight to change their report.

'Might we, in fact, be the baddies?'published at 11:06 British Summer Time 14 May

11:06 BST 14 May

Peter Ruddick
Business reporter at the inquiry

Had you ever asked yourself: might we, in fact, be the baddies?"

That was the question of the morning to former Post Office communications chief Mark Davies.

There will be lots of specific queries on how the organisation responded in individual cases but Julian Blake, counsel to the inquiry, began with a more general exchange about tone and approach.

Time after time, Mark Davies was shown emails in which he described journalists as being "campaigning" or talking "garbage". Time after time, he was asked if that represented a culture of being 'open to challenge'. A claim he made in his witness statement.

Davies admitted that some of the emails looked "ludicrous" and that he had lots of "regret" that he did not question what he was being told internally.

However, he said he was not a technical or legal expert and was operating in good faith. That line will be tested over the course of the day.

Image source, Post Office Inquiry

Davies is now being asked about his relationship with Alice Perkins, former Post Office chair.

Did you join the Post Office because of the chair, Blake asks.

Davies says that he used to work for Perkins' husband, Jack Straw, and that he heard about the vacancy through his connection, but can't recall exactly how he got the job.

Looking at the minutes from a board meeting held in July 2013 - at which no lawyers or IT experts were present - the CEO explains Horizon would have anomalies like any system, but that these had been dealt with.

Blake questions why Davies was "personally tasked with changing the report of an independent investigation".

"I don't think I was," he says.

"I think it was to combat any inaccuracies. I didn't feel I was being told to change the report.

Asked if he saw the report before publication, says he can't recall.

The independent forensic accountants Second Sight played a key role in exposing the scandal, finding flaws in the Horizon computer system which generated false evidence of cash shortfalls at sub-post offices, leading to wrongful prosecutions of sub-postmasters.

Ali Abbas Ahmadi
Reporting from the inquiry

One of the things that stands out to me is the tone of Mark Davies' references to journalists over the years.

We have seen emails from Davies accusing journalists - including some from the BBC - of having an "agenda", that they were "campaigning" against the Post Office, and calling their work was "appalling" and "garbage".

Julian Blake presses Davies on this point, asking: "Email after email after email blaming the journalists, isn't it?"

Davies admits: "With the benefit of hindsight, some of them look ludicrous in hindsight, I agree".

"Have you ever asked 'might we be the baddies?'" Blake asks, referencing the popular meme where two Nazis ask this question.

Davies says he has asked himself that question many times, but maintains he believed at the time that the Post Office was doing the right thing.

He highlights that he was a journalist for 14 years, and that he as "a huge amount of respect" for them.

"I was assertive in this instance, which I regret," he says, and adds that he wishes he had been as assertive with the Post Office internally.

Counsel for the inquiry Blake says there is email after email with Davies "blaming the journalists" and asks whether he ever stopped to consider whether "we might be the baddies".

Davies says he has asked himself this very question "many, many times", but maintains the Post Office "really believed we were doing the right things".

He points to the mediation scheme, created for sub-postmasters who believed they were affected by faulty Horizon software, and that the Post Office advertised this through its communications channels.

He tells the inquiry his emails about media coverage, in which he was adamant there wasn't a problem with Horizon, look "ludicrous" with the benefit of hindsight.

He adds that the journalist referred to by him as being behind what he described as a campaign was the BBC's Nick Wallis.

He says he wished he had pushed harder against the Post Office's supplier, as they had with journalists, adding that he has a "huge amount of regret over this".

Image source, Post Office inquiry

Blake now reads out key parts of emails where Davies describes multiple media reports as being "skewed" to present a point that the journalists want to make.

In one email, Davies says the "journalism is appalling" and that this kind of campaigning journalism is likely to "capture sympathy".

Blake then refers to several emails about a request from the BBC for an interview about the Horizon system.

In his email replies, Davies says they should tell the BBC that they are trying to get us to break our confidentiality conditions of the mediation. At one point, Davies writes that he can't take this "garbage" much more.

Davies witness statement is again being pulled up with highlighted sections about maintaining balance and impartiality.

He made several claims of "inaccurate media coverage" and "apparent lack of impartiality" from journalists, including BBC's Panorama.

Panorama, Blake says, "hadn't they got it right?"

Davies replies by saying "we know more now then than".

"I want to say how very sorry I am," he adds, for "prolonging the pain and anguish" caused to sub-postmasters.

He maintains when operating with Panorama he "acted in good faith".

Blake asks, "did you acknowledge the media was getting it right, as you now say to the inquiry?"

He admits he didn't.

In his first few questions, Julian Blake has been challenging Davies on the language he used in his witness statement - specifically on his assertion that the Post Office senior leadership had a "culture open to challenge".

Blake asks whether not putting an interviewee forward for a BBC Panorama programme looking into sub-postmaster convictions exemplified this culture.

Davies says the Post Office had planned to put someone forward but decided not to when it was clear the programme was going to go into individual cases.

An email is then shown where it's discussed how the episode was "damaging".

His response to the email, Davies writes back that there was no evidence that Horizon was to blame for branch losses. He tells the inquiry this was the understanding at the time.

Davies says he held a two-hour briefing with colleagues after the Panorama programme, explaining that "sometimes we got it right, sometimes we got it wrong".

We're now seeing an email chain discussing media coverage of the Horizon scandal.

Blake refers to an email that Davies sent to Angela van den Bogerd about not responding to a BBC Radio 4 programme about imprisoned sub-postmasters.

Blake asks Davies, was failure to address the BBC coverage an example of a culture that was not open to challenge?

Davies says that there is always a "very fine judgement" about whether to respond.

"I may have got that one wrong," he admits, adding that they were very difficult lines to get right.