L Patrick Gray III, who has died aged 88, only a month after the revelation that his deputy had been Deep Throat, was the ultimate fall guy of the Watergate burglary. A Nixon loyalist who was made director of the Federal Bureau of Investigation the day after J Edgar Hoover died, he was too straight and naive to survive in the shark pool that was President Nixon's Washington.
Left, as a Nixon aide put it, to "hang slowly, slowly twisting in the wind", he was ordered to "deep six" - destroy - FBI files of the investigation into Watergate and did so. The White House fed him fake files alleging that the Kennedy administration had been complicit in the murder of President Ngo Dinh Diem of South Vietnam. All the while Gray's deputy, W Mark Felt, resentful that he was not made Hoover's successor, was secretly meeting Bob Woodward of the Washington Post in an underground parking garage across the Potomac river, to give him a lead on what the FBI knew.
Last month Gray revealed his resentment about his deputy's betrayal. In a television interview, Gray said he felt "deep inner hurt" when he learned that Felt was Deep Throat, the name that Woodward and co-author Carl Bernstein gave to their informant. Felt, taxed by Gray, had denied it. Gray said he "made the gravest mistake of my 88 years" in working for Nixon. He never spoke to the president after Watergate, and when Nixon sent copies of his various books, he always returned them.
Gray was widely charged with failing to understand the gravity of Watergate, but he did warn Nixon that "people on your staff are trying to mortally wound you". He had never realised that Nixon himself had ordered the cover-up to frustrate Gray's investigation. At the end of his life he did say that his situation was "a madman's horror".
His son, Ed, responded angrily to media reports that his father was one of the guilty men of Watergate. But Gray's lawyer had admitted that his client "peeked" at the contents of two envelopes before burning them. According to evidence at the Watergate hearings, the envelopes contained copies of a fake State Department cable implicating President Kennedy in the assassination of Diem and a dossier with bogus information about Senator Ted Kennedy. Ed Gray seems to have established that his father did not throw the envelopes into the Potomac, but burned them instead.
Gray was brought up in St Louis, oldest son of a railway official. He went to Rice, the small but highly respected college in Houston, Texas, and won a scholarship to the US naval academy at Annapolis. He served as a second world war submarine commander and, postwar, was sent by the USN to study law at George Washington University in Washington DC. While he was there he became a friend of Nixon, then in his first congressional term and, like Gray, had been a naval officer in the Pacific.
Gray served in the USN in the Korean war, but in 1960 he retired to work for Nixon, then vice president and about to run for the presidency. Nixon lost, and Gray became a lawyer in Connecticut. When Nixon won in 1968, Gray was an assistant to the cabinet secretary for health, education and welfare, then an assistant and subsequently deputy attorney general, before his appointment as the FBI's acting head a month before the Watergate break-in.
Gray was a non-smoking conservative teetotaller . He intended to change some of Hoover's strict conventions in the FBI, an elite force with little idea that it was out of touch with the modern world. He never realised how much the FBI resented him as an outsider.
Even after he was replaced at the FBI in 1973, Gray was stuck with Watergate. In 1978 he was indicted for authorising FBI agents to break into the homes of suspected members of the terrorist organisation, the Weather Underground. The charges were dropped, but Gray had to cash in all his insurance policies, sell his house and his shares to pay the lawyers' bills.
Gray married Beatrice Kirk De Garmo, the widow of one of his Annapolis classmates. They brought up her two sons by her first marriage and had two sons of their own. They all survive him.
· L Patrick Gray III, lawyer, born July 18 1916, died July 5 2005