HONGKONG senior Trade Commissioner Mr Stephen Day will appear before a British public inquiry tomorrow into the scandal surrounding the export of arms to Iraq during its war with Iran. Mr Day, who returned to Britain recently because of illness, has been summoned as one of the first witnesses before the high profile inquiry into what has become known in Britain as Iraqgate. The saga began last November when three executives of Matrix Churchill, a company accused of illegally selling arms to Iraq, were acquitted when they claimed they had acted with the full knowledge of the Government. Mr Day will be questioned by Lord Justice Scott about what part he and government ministers played in the affair. He was head of the Middle East Department at the Foreign Office during 1984-87 - the height of the Iran-Iraq war, and therefore should have pivotal knowledge of what went on. He later went on to work directly for the Prince of Wales and as British ambassador to Tunisia before arriving in Hongkong in 1991. Mr Day is believed to be receiving medical treatment in Britain before returning to Hongkong briefly. He is to be replaced soon by Mr Francis Cornish, at present the Foreign Secretary Mr Douglas Hurd's press secretary. The Iraqgate allegations are a running cause of embarrassment to the Major Government, with allegations from prominent former figures within the Foreign Office at the time that ministers knew weapons and other lethal equipment were being sent to Iraq, much of it via Jordan during the war with Iran. Then foreign secretary Sir Geoffrey Howe, now Lord Howe, issued strict guidelines in 1985 that nothing should be exported to Iraq which might prolong the war. But the rationale behind the secret exports seems to have been the Western wish to bolster Saddam Hussein then, as he was seen as the bulwark against Iranian Islamic fundamentalism. Documents have already been discovered showing how equipment from night sights, aircraft parts and engines through to laser range finding equipment was exported to Iraq during the war. The Jordanian ambassador to London, Mr Fouad Ayoub, said: ''Really it is no secret that during the years of the Iran-Iraq war many countries, including Western countries and Arab countries, were keen to see that the Iraqi military capabilities remained undiminished.'' Mr Day is scheduled to testify after the former foreign office minister responsible for Hongkong in the early 1980s, Sir Richard Luce. Other former ministers are due to appear this month and both Lady Thatcher and Mr John Major are due later.