OTTAWA - The erasure of key wiretap tapes by Canada's spy agency punched a hole in the evidence later needed to prosecute the Sikh extremists responsible for the Air India bombing, a public inquiry was told Tuesday.

James Jardine, a former B.C. Crown attorney who now sits as a provincial court judge, testified that when he heard of the erasures by the Canadian Security Intelligence Service he jotted down a four-word note to himself: "Inconceivable, incomprehensible, indefensible incompetence.''

Jardine didn't go as far as to suggest the loss of the tapes was fatal to the prosecution of any of the suspects. But he made it clear that it complicated the difficulties already faced by the RCMP and the Crown.

"Those tapes would have been a very helpful piece of evidence, either to demonstrate a person's involvement or to demonstrate that a person was not involved,'' Jardine told the inquiry headed by former Supreme Court justice John Major.

In fact, he recalled, one of the first requests he made to the RCMP when he was assigned to the case was to make sure any pre-bombing wiretaps of the suspects were retained.

Previous evidence has shown the Mounties thought they had a deal with CSIS to do just that. But the security service erased more than 150 tapes of Talwinder Singh Parmar, head of the Sikh separatist group Babbar Khalsa, who was to become the prime suspect in the June 1985 downing of Air India Flight 182 that killed 329 people.

Parmar and an associate, Inderjit Singh Reyat, were arrested by the Mounties within months of the bombing, but the only charge that stuck at the time was one of possession of explosives against Reyat, who was fined $1,000.

As police and prosecutors continued to pursue the case over the next several years, Jardine said they were repeatedly frustrated by the spy agency's reluctance to allow its secret intelligence to be used in court, where its information-gathering methods would be exposed to the glare of publicity.

CSIS, for its part, insisted in a series of memos and letters that it wanted to be as helpful as possible, but said its co-operation couldn't go so far as to compromise legitimate national security interests.

Reyat was the only person ever convicted, on a charge of manslaughter, for his roles in both the downing of Flight 182 and the building of a second bomb that exploded at Narita airport in Japan, killing two baggage handlers.

Two other men, Ripudaman Singh Malik and Ajaib Singh Bagri, were acquitted in a belated trial in Vancouver two years ago. Parmar slipped out of Canada after the bombing and was shot deed by Indian police in 1992.