The independent panel investigating the Daniel Morgan scandal is refusing the home secretary’s demands to hand over its report before it can be published, as senior police sources say nothing in the case affects national security. Priti Patel provoked fury on Tuesday by demanding the findings be handed over for review prior to publication, angering both the Morgan family and members of the panel conducting the inquiry. Patel cited the need to consider national security and human rights obligations before making the report public. But one source with close knowledge of the five Metropolitan police inquiries into the case and the documents involved, said: “There are no national security issues involved. There are national embarrassment issues.” The row has delayed publication of the report, which was due next Monday, eight years after the inquiry was set up. The report, which runs to more than 1,000 pages, was already at the printers when the Home Office intervened. Morgan, a private investigator, was murdered in March 1987 in south London, with no one convicted for his murder and the Metropolitan police accepting corruption blighted the case. Morgan’s family also believe Rupert Murdoch’s media empire has questions to answer. On Wednesday night the panel, chaired by Lady Nuala O’Loan, and Home Office officials were discussing the standoff. Raju Bhatt, solicitor for the Morgan family, told the Guardian that the panel should stand firm, and the home secretary should back down to end the “torture” of the Morgan family and their 34-year quest for answers. He said the panel should consider court action. Bhatt said the government had been complicit in police failures: “The failure is not just the police, the Home Office is complicit in these failures. “We are suspicious about the motives for the home secretary’s unwarranted and late intervention. The family look to the panel to stand up to the home secretary and defend its independence and integrity. “If I was advising the panel I would be pointing the panel to the high court if the home secretary does not see sense.” The Guardian understands the Met did not ask for any special review to be undertaken by the government. And the panel believes the home secretary’s demands were not part of their agreement. It fears that their independence may be compromised. However, the Home Office pointed to one part of the panel’s terms of reference which, it said, allows it to see the report before agreeing to its publication, and make changes as it sees fit. The relevant section says: “The independent panel will present its final Report to the home secretary, who will make arrangements for its publication to parliament.” A government source said: “Before the home secretary lays it before parliament she has to satisfy herself as to her statutory duties. “Those relate to national security considerations and that it complies with human rights obligations such as the right to life (article 2) and the right to privacy (article 8).” Labour’s home affairs spokesperson, Nick Thomas-Symonds, said: “There’s no doubt this is an incredibly important and sensitive report. However, given the Home Office ordered this report in 2013, ministers have had years to plan for its publication, whilst the family has been waiting in anguish. It’s deeply disappointing that there has been a delay at the last moment, and the family deserve answers for this. Any remaining work needs to be completed without delay.” The panel’s wide ranging inquiry was ordered in 2013 by then home secretary, Theresa May. It was tasked to look at “police involvement in the murder; the role played by police corruption in protecting those responsible for the murder … and the failure to confront that corruption”. The panel also investigated “the incidence of connections between private investigators, police officers and journalists at the former News of the World and other parts of the media, and alleged corruption involved in the linkages between them”. The standoff means no date has been set for its publication. The Home Office insists there is nothing sinister in its motives for wanting to see the report ahead of publication so it can review it. “As soon as we receive the report, we can begin those checks and agree a publication date,” a spokesman said. “The home secretary fully supports the family-first approach and is hoping to meet them to discuss the report and its findings in person.” On Tuesday, Morgan’s family said the report’s delay was a “kick in the teeth” and served only to “betray and undermine the very purpose of the panel”. In a statement, they added: “The home secretary’s intervention is not only unnecessary and inconsistent with the panel’s independence. “It is an outrage which betrays her ignorance – and the ignorance of those advising her – with regard to her powers in law and the panel’s terms of reference. “It also reveals a disturbing disregard for the public interest in safeguarding the independence of the panel and its report.”