7NEWS has confirmed with senior government sources that DFC Commissioner Herbert Lord has finished his final report; it was prepared independently of co-chair of the Commission of Inquiry Merlene Bailey-Martinez. Because the Prime Minister is on tour we could not confirm whether he has received it, but, according to our source, that would only be a formality because it is finished and it is final.

It's a major development because it now cleaves the Commission's work into two and makes it such there cannot be one official version of what really happened at the DFC between 1999 and 2005. Every discussion will have to be underpinned by an asterisk and referenced to one of two reports.

But in his letter of July third to Merlene Bailey-Martinez, Lord warned her that at 4 meetings between April and June, he requested that they write the report. He concludes, "I have not received any cooperation from you on this; I have now taken the opportunity to write my own report." He tells her, "you may write your own report at a subsequent time and date…and submit...as you see fit…"

Yesterday, Bailey-Martinez wrote back to Lord. 7NEWS has also obtained a copy of that letter and it states her strong opposition to what she calls a unilateral submission. She says such a report will negate the work of the commission, and would be unofficial.

And as for who's to blame, Bailey-Martinez tells Lord that it is he who has been inaccessible, and accuses him of frustrating efforts to finish the commission's work in time. In another letter to the Prime Minister, also dated yesterday, Bailey-Martinez asks him not to accept the Lord report. She says that the work of the commission ahs been held up by pending interviews with the Novelo brothers and the Universal Health Service group.

But is it too late for Bailey-Martinez? That's what our senior government sources say, and next week we'll be able to tell you if the PM has formally noted receipt of the report.