CMC Chair Ross Martin told the PCMC last week he believed the accidental release of about 741 sensitive documents due to an administrative error was "deeply embarrassing", evidence released today revealed.
He also revealed up to 4000 documents may have been shredded.
"It is not about the damage to us. And you make the point that it is a stuff-up. The damage to us is irrelevant by comparison to the potential risk to the people..who may be in the material,'' Mr Martin said.
State Archivist Janet Prowse told the PCMC about 19 people viewed the sensitive files.
Mr Martin told the committee it was one of those people, former special branch officer Barry Krosch, who was seconded to the Fitzgerald Inquiry, who discovered the wrongly released documents, including confidential surveillance documents, while doing research at State Archives.
"It seems that a former Fitzgerald inquiry staffer named Krosch was writing a book,'' Mr Martin told the PCMC.
"I think he is doing some sort of research, a doctorate or something of that sort. He went to the archives to have a look for things and discovered all of these interesting things, realised that they probably shouldn't be publicly available and contacted the CMC,'' he said.
On the shredding, Mr Martin told the committee there was a possibility up to 4000 Fitzgerald Inquiry documents may have been accidentally destroyed.
"It seems that back in 2007 some documents may have been destroyed that were Fitzgerald inquiry records which should have been kept for much longer,'' he said.
"Fitzgerald inquiry records should have been kept permanently, I would have thought, but I am not totally familiar with the details of this.
"I am presently informed that what happened was back when the Fitzgerald inquiry records became CJC records some one or more persons thought it useful to pull papers from the Fitzgerald records and use them as a starting point for CJC records as intelligence files, files to start doing actions on.
"Those files were then created, actioned and eventually closed with approval, but mistaken approval it may turn out. In 2007 they were destroyed without anybody realising that on those files was original Fitzgerald material.''
He told the PCMC he regretted not informing them of the accidental public release of the documents but said he doubted underworld figures had been trawling the archives to find them.
Earlier, Ms Cunningham told the inquiry the PCMC had been the subject of "unfair, uninformed comments" in recent days.
She said such comments would not be tolerated now the inquiry had commenced and would be actioned.
Ms Cunningham said the committee had limited powers to direct the CMC and she believed it acted swiftly when becoming aware of the accidental release of documents late.
"We are not afraid of positive reform of the CMC or the PCMC," she said.
This afternoon former special branch officer Barry Krosch, who was seconded to help with the landmark Fitzgerald Inquiry, will give evidence via video link.
Mr Krosch will give evidence about the availability of the sensitive files which were wrongly classified as suitable for public release.
Ms Cunningham repeatedly quoted Tony Fitzgerald, who led the Fitzgerald Inquiry, as she took Premier Campbell Newman and Attorney-General Jarrod Bleijie to task over their comments about both the PCMC, and CMC chair Ross Martin, who has since taken sick leave and will not be returning to his post.
"It is misleading to suggest the PCMC caused the issues the subject of this inquiry," Ms Cunningham said.
"The committee has been the subject of unfair, uninformed, adverse comments," she said, which she alleged were designed to be sensational.
"In the context of a serious inquiry, words can be more than wind. Words can easily damage the reputation of individuals before they have adequate opportunity to answer the charges against them. Words can create an atmosphere of fear.
"Words can in short interfere with the proper conduct of an inquiry."
Ms Cunningham did not name Mr Newman or Mr Bleijie but told the inquiry: "Those that have been injudicious to date should take it upon themselves to reflect and remedy their actions or words".
"We will no longer tolerate words that have the propensity to distract us from our inquiry.
"Any improper interference ... will in future be actioned."
Ms Cunningham said she believed any future reform of either the CMC or the PCMC "should be done with the public interest and notions of accountability at its heart".
Opposition Leader Annastacia Palaszczuk yesterday referred Mr Newman to Speaker Fiona Simpson over his comments including his description of the PCMC as a lapdog, which she alleged were in contempt of the Parliament.
Six staff from State Archives, including State Archivist Janet Prowse, made a brief appearance this morning before the inquiry adjourned until 4.30pm to hear from Mr Krosch.
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