AN Appeal Court judge inquiring into the collapse of a murder trial has criticised police and the Correctional Services and Legal departments for failing to provide adequate protection to the key witness in the trial. In the first of two reports on the fiasco, Mr Justice Kempster described the departments as ''victims of inertia, resignation, or despair''. Mr Bui Van Xuan's refusal to testify led to the acquittal of a Vietnamese man accused of murdering a fellow inmate at Whitehead Detention Centre last May. The Governor, Mr Chris Patten, ordered Mr Justice Kempster to conduct an inquiry on January 12 into the protection arrangements offered to Mr Bui and why the prosecution offered no evidence after Mr Bui backed out instead of adopting a course which wouldhave permitted a future trial. Mr Justice Kempster, given a budget of $7.6 million, is expected to submit a full report on May 12. Among the departments criticised for failing to do their best to assure Mr Bui that he could safely testify, the Correctional Services Department (CSD) was the first to admit its mistakes. Mr Justice Kempster said: ''Everyone was happy to reach the conclusion that all that could have been done to assure Bui of his safety had been done. It had not.'' He said the Attorney-General, Mr Jeremy Mathews, the Crown prosecutor Mr John Wood, the police and the CSD formed their judgement against Mr Bui on ''unattributable intelligence''. These departments alleged that Mr Bui had no genuine fear for his personal safety or that of his family and he tried only to manipulate the authorities to return to Whitehead to sell drugs and to secure refugee status. Mr Bui, who was moved to High Island while awaiting the trial, had asked to be returned to Whitehead because he felt safer there. Mr Justice Kempster said that after his eight-week inquiry he was satisfied that Mr Bui was genuinely fearful that he might sustain grave physical harm if he testified against the accused, Mr Nguyen Van Bau, and was sent to High Island Detention Centre. Mr Bui has received several anonymous letter threatening his family if he testified. The trial opened on October 19 and collapsed a week later. During the hearing, the CSD offered to provide Mr Bui and his family alternative accommodation in Victoria Prison or section nine of Whitehead without informing him that their stay would only be for the duration of the trial. Mr Justice Kempster queried why the arrangement was never mentioned even though it was obviously of vital concern to Mr Bui. Responding to the report, CSD commissioner Mr Eric McCosh said that ''with the benefit of hindsight we should have said we were offering Victoria Prison on permanent terms''. ''I think we made a mistake and we will be looking into that,'' he said. Mr Justice Kempster found that the police had decided in the early stages of the trial against providing ''safe houses'' to Mr Bui. The police also did not furnish the prosecuting counsel, Mr Alan Lucas, who arrived in Hongkong only two months before the trial, with copies of any statement in which Mr Bui had said that he would or might not testify or a copy of any threatening letter. Mr Justice Kempster said the police witnesses were not ''manifestly candid'' when they gave their evidence to the commission on the protection of the witness. A police spokesman said the report would be studied and appropriate action taken. During the trial, Mr Lucas was told by the police that a safe house could be considered and the hearing was adjourned to allow the option to be explored. ''If, as it seems, the police had already decided against a safe house for the witness, Mr Lucas was lamentably misled,'' Mr Justice Kempster said. He was surprised that Mr Lucas in his case report did not spell out the real cause of the final collapse of the trial, that Mr Bui was to be taken to High Island after giving evidence. Instead, Mr Lucas adopted the CSD and police suspicions about Mr Bui's motives for seeking transfer. Mr Bui was criticised as being a ''difficult witness''. ''He was more concerned to state his own view of the circumstances in which, from time to time, he and his family were placed than to answer questions however often they were repeated,'' Mr Justice Kempster said.