Fujitsu Europe’s boss has admitted he “does not know” if the Post Office Horizon IT system at the heart of hundreds of sub-postmasters’ wrongful convictions is reliable.

Paul Patterson told the inquiry into the scandal there “have been bugs errors and defects” in the accountancy system and it is clear “that there is a level of unreliability”.

He agreed that this would be an issue for sub-postmasters currently using Horizon.

In his second appearance in front of the inquiry, Patterson also admitted that he did not know whether Fujitsu had done an independent report into the software system.

Though he added that he would welcome a third-party investigation.

Between 1999 and 2015, hundreds of sub-postmasters and postmistresses were wrongly prosecuted after Horizon made it look like money was missing from their branches.

Fujitsu’s Horizon contract is up for renewal early next year and could be extended for a further five years.

Patterson said he was “very worried” about what might happen if this happens because of how unreliable Horizon is.

“In my experience… if you don’t keep [IT systems] upgraded, I cannot determine what will or will not happen, which is part of my nervousness of it being extended,” he said.

Monday marked the start of the final week of evidence at the inquiry, more than two and a half years since it started hearing evidence in public.

Mr Patterson said Fujitsu was committed to paying out compensation to the victims of the scandal, calling it a “moral obligation”, but said the firm was waiting until the end of the inquiry before actually doing so.

In a heated exchange with Sam Stein KC, who represented some of the victims, Mr Patterson was pushed on why this was.

“You already accept that there is a need for Fujitsu to put its money where its mouth is,” said Mr Stein.

Mr Patterson said the company wanted to hear all the evidence before going ahead. “These are complex matters and we need to understand all the components,” he said.

Earlier in the day, Conservative Party leader Kemi Badenoch gave evidence – as the former business secretary, the government-owned Post Office came under her remit.

She said that the airing of the TV drama into the Post Office scandal “brought the urgency” to speed up compensation pay outs for sub-postmasters.

The government needed to be “seen to be doing the right thing”, said Badenoch.

She accepted at the inquiry into the scandal that it was “extremely disappointing” that it took the ITV drama to escalate the issue.

But she said her row with the Treasury over the time it was taking to issue compensation last August was not just a case of her “posturing”.

Badenoch said Mr Bates vs The Post Office, which was broadcast in January, raised awareness of the issue, turning compensation from “a value for money perception to a public perception question”.

She insisted work was being done on the issue by the previous government, but admitted it was “too slow” and criticised the whole “government machine” for slowing down compensation.

The inquiry heard how Badenoch told the Treasury she wanted to give £100,000 “flat offers” to all sub-postmasters with a claim, with the inquiry to the counsel Jason Beer KC describing her mention of “ministerial direction” as a threat.

He said this could be seen as “soft power” or “posturing”.

But Badenoch denied the claim, saying: “It was signalling the direction I wanted the department to take to make it very clear.”

She said she believed speed should triumph over accuracy, and admitted that this might not have represented value for money from a taxpayer point of view.

Badenoch was also questioned over her sacking of former Post Office chairman Henry Staunton.

She said she was not aware of how serious concerns were about him because of “vanilla updates” from civil servants.

Her evidence statement provided her reasons for Staunton’s dismissal, which included the former chairman attempting to shut down a whistleblowing probe into his conduct, behaving in an aggressive, intimidating and disrespectful manner, and having a poor understanding of Post Office’s work.

Staunton has previously defended himself after a report found he used derogatory language during a meeting about recruiting a board member. He has also refuted Badenoch’s claim that he was under a “formal investigation” for “serious matters such as bullying”.

Earlier on Monday, Business Secretary Jonathan Reynolds said ownership of the Post Office could be handed over to its thousands of sub-postmasters across the UK.

“Nothing should be off the table for the future of the Post Office,” he said, adding that the organisation’s future will be set out in the first half of next year.

He said Post Office’s corporate culture was “at the root of this scandal” and that some sub-postmasters had “lost all faith in the justice system” because of it.