After its initial reluctance to disclose some of the secret documents relating to 1985 Air India bombing on grounds of national security, the Canadian government has indicated that it may soon release some of the classified information.

The Government of India and Vancouver police and senior officials involved in the ongoing Air India probe were consulted as Canada was seeking ways to release more information without compromising national security, government lawyer Barney Brucker told a commission of inquiry that earlier halted hearings for two weeks due to haggling over the issue.

Progress is being made on releasing some of the secret documents related to the inquiry, he said.

Former Supreme Court judge John C Major, the head of the commission who had threatened to shut down the inquiry in February because not enough internal documents were being made public, urged government lawyers to redouble their efforts to reach a deal with the commission counsel on how much evidence can be made public.

Justice Major said the aim must be to keep the commission afloat and not let it sink without fulfilling its mandate to investigate the terrorist bombing of Kanishka jet off the coast of Ireland on June 23, 1985, that killed 329 people, most of them Canadian citizens of Indian origin or descent.

But neither federal lawyer Barney Brucker nor chief commission counsel Mark Freiman could set a definite time when the matter will be resolved though the government indicated it will soon release more uncensored documents to the commission and victims' families.

Brucker warned that excessive openness might be potentially disastrous by compromising important government sources in the fight against terrorism.

"It would be like switching off a light and attempting to defend ourselves in the dark," Brucker said.

"If there has been a dispute about releasing some documents in public, it is not because the government agencies are hiding information," he said. They just want to protect the identity of intelligence sources and police informants, and avoid compromising the continuing criminal investigation of the attack.

Major said he is grateful the government is taking extra steps, though he said he is uncertain if bureaucrats are as willing to open up the process.

"I will have some skepticism about the troops behind you being able to follow your command," Major said.

On its first day after resuming hearings, the inquiry was told that Canada's national security agencies suffered the worst kind of intelligence failure prior to the 1985 Air India bombings.

"We came close," said Wesley Wark, an expert on national security issues at the Munk Centre for International Studies at the University of Toronto.

But the failure to take advantage of wiretap surveillance and other information regarding BC-based Sikh extremists prior to the two bombings proved that "close wasn't good enough," Wark told the inquiry.

He said longstanding cooperation problems between the Canadian Security and Intelligence Service, which was created in 1984, and the Royal Canadian Mounted Police wasn't fully addressed until a new agreement was struck between the two feuding agencies last year.

Major resisted a plea from a lawyer for the families of some of the 329 who died in 1985.  Jacques Shore said he did like an extra two weeks to study documents once they are released by Friday.

But Major said he will stick to next week's scheduled one-week adjournment unless the families, after seeing what the government provides to them later this week, provide a formal written request for more time.

Major said he still fears that his probe could be jeopardized by continued delays.

"We've seen commissions sink below the water and accomplish nothing," he said.

Only one man has been convicted in the bombing till now.

Two more -- Ripudaman Singh Malik and Ajaib Singh Bagri -- were acquitted at a trial in Vancouver in 2005.

The commission was appointed by Prime Minister Stephen Harper a year ago to examine the affair in the hope of drawing lessons still relevant for anti-terrorist policy.

He has no power to hold anyone criminally responsible for the bombing, nor to lay blame on police and security officials for their handling of the matter.