The head of the Air India inquiry suggested yesterday that legislative change is needed to guarantee the smooth flow of critical information between Canada's spy agency and the RCMP.

Commissoner John Major has heard months of evidence about the impact the strained relationship between the Canadian Security Intelligence Service and the RCMP had on the early years of the criminal probe of the June 23, 1985, plane bombing that killed 329 people.

While witnesses from both agencies have testified that there is now greater understanding between CSIS and the RCMP, Mr. Major said changing the law could ensure better co-operation.

"The argument goes that we should remove that burden of relationships and give them legislative help," Mr. Major said. "There should be a greater ability in the framework of the organization for CSIS and the RCMP to interchange information."

But former CSIS director Reid Mor-den was skeptical an amended law would make a difference. "My reflex reaction after 35 years in large bureaucracies is that -- whether it is legislation or a lower form of regulation or rule -- if there is not the goodwill, if there is not the intent to make the underlying legislation or regulation work, the ingenuity of people to do otherwise will continue," he said.

He took on the top CSIS job in September, 1987, after his predecessor, Ted Finn, was forced to resign over the service's handling of a wiretap on a suspected Sikh terrorist a year after the Air India bombing.

In one of his first acts as CSIS director, Mr. Morden had to confirm publicly the service had erased hundreds of hours of wiretaps of Air India mastermind Talwinder Singh Parmar.

Those erasures crippled the early years of the criminal investigation, RCMP Deputy Commissioner Gary Bass testified this week.

Like several other CSIS witnesses, Mr. Morden stressed yesterday that the tape erasures were done according to the service's policy.

He joined former director James Warren in saying he wished the Parmar tapes had been kept "if only because it would have made very clear what there was and more to the point -- what there wasn't --in the tapes."

While CSIS may have "dropped the ball" in identifying the Air India conspiracy as it was unfolding, Mr. Morden said a lot of agencies also missed the chance to stop the terrorist plot.

"There's a lot of responsibility here," Mr. Morden said. "If 329 people die, well, somewhere there's something has not happened that should have happened."

Mr. Major asked Mr. Morden if the RCMP should be able to use the same lower threshold that CSIS operates under to launch terrorism probes.

CSIS can act on a mere "suspicion" of conduct that threatens national security, while the RCMP has to have a reasonable belief a crime is about to be committed.

Mr. Morden, who left CSIS in 1991, suggested that there should be a new intelligence position created at a high level in government to work with all the various agencies within the country that deal with intelligence, security and terrorist threats.

"I think you have to have somebody whose full-time job is keeping those cats in the room that they're supposed to be in," Mr. Morden said. "Governments are trying to respond to a world which has become a much more dangerous and a much more ruthless place than it was a number of years ago, and the task of making all the things run in the same direction is commensurately more difficult and needs, perhaps, a new look at the kind of machinery we have."