'I used to be a bit of a crook,' says Dai Morris, smiling ruefully. 'Ringing cars, that sort of thing. But I gave it up. I was getting too much hostility from the locals, to be honest. But this...' The prison's visiting room falls silent. 'I couldn't have done this.' He shudders.

Morris, 41, is serving four life sentences for the murders of his former lover, Mandy Power, her daughters Katie, aged 10, and Emily, eight, and her disabled mother, Doris Dawson, 80. All four were bludgeoned to death at their home, which the killer tried to set on fire, in Clydach, a former pit village clinging to the mountains on the outskirts of Swansea, early on 27 June 1999.

Three years later, at the end of a trial at the city's crown court in which the jury heard how Power had been having a lesbian relationship with Alison Lewis, a former police officer who was once a suspect herself, Morris was convicted and given four life sentences.

Now fresh evidence disclosed by an Observer investigation suggests this was a miscarriage of justice and that, as stickers and graffiti on walls and lampposts in the city claim, Dai Morris is innocent. This month the Court of Appeal took the unusual step of granting his lawyers legal aid to prepare an appeal, which is likely to be heard early next year.

Morris, now held far from his home at Full Sutton prison near York, talks animatedly. In an exclusive interview with The Observer, he comes across at first the way his family describes him - 'happy-go-lucky, a bit of a character; you could say Jack-the-lad'. But from time to time fear flickers in his eyes. 'If I don't win my appeal, I know I'll never be released,' Morris says.

If he is telling the truth, he is, as he says, partly responsible for his own predicament. There was no forensic evidence connecting him with the crime: no trace of his fingerprints or DNA. His conviction rests on just two points: the discovery of his gold chain in Power's house and lies he initially told police about it; and second, his lack of an alibi.

According to the prosecution, Morris and Power had never had a sexual relationship, and he knew her only because she was the best friend of Mandy Jewell, Morris's girlfriend. Power had no partner when she began seeing Lewis in November 1998. Lewis who, like Power, had two small daughters, had already had several lesbian relationships, but for Power this was the first.

Morris killed her and her family, it was said, because he went to her house, drunk and wanting sex, and went berserk when she refused.

His own story is very different. He had been living with Mandy Jewell for seven years, but their relationship was marred by arguments which could turn violent. 'We did have fights,' Jewell admits.

Morris said the worst was when she hit him on the head with a piece of wood after 'she caught me shagging this girl from round the corner'. From the start of his clandestine relationship with Power in 1998, he says his biggest fear was that Jewell would find out.

When Power began her affair with Alison Lewis, Morris says he did stop seeing her, not because of the intensity of the new lovers' feelings for one another but because he had been banned from driving and could not easily get to her home. Early in 1999, however, he insists they began to talk again on the phone and met for coffee. For a moment he smiles. Power 'was just a sex-mad woman. That's all I can say about her,' he says. 'It wasn't enough of a challenge for her to have just one relationship. I took the piss out of her, told her she was taking this lesbian thing too far.'

A new piece of evidence supports his claims. Although the prosecution said Power had no contact with Morris, her telephone records show she rang him repeatedly on Valentine's Day 1999. Moreover, he was not at the flat he shared with Jewell, but at another property he kept nearby - to stay in, Jewell says, 'when I got sick of him and kicked him out'.

The trial judge, Mr Justice Butterfield, told the jury in his summing up that if they thought Morris was lying when he said he and Power were having a relationship, this would be important in reaching their verdict.

On 25 June 1999, just two days before the discovery of her body, Morris says he went to Power's house in the morning, while the children were at school, and had sex. Before he went to her bedroom, he says he left his chain, which had a broken clasp, on her kitchen counter.

After the murders, the chain assumed a frightening significance. Morris told his cousin, Eric Williams, about it: 'If I'd murdered her, that [leaving it behind] is the last thing I'd have done. I wouldn't have told a soul. I told him because I trusted him, and I was scared.'

Months later that conversation led to Morris becoming a suspect. When he was first arrested, he lied to detectives; again, he says, because he was scared.

On the night of the murder, says Morris, he and Jewell had a row at the end of an evening in a local pub. He left alone, and decided to walk to his parents' home eight miles away, but it started to rain when he was halfway there. He went instead to the home he and Jewell shared, getting there by 3am - an hour before the killings. Yet this gave him no alibi: he went to bed in the spare room, and Jewell remained asleep.

The investigation into the killings by South Wales police was far from rapid. Until a few weeks before Morris was charged in March 2001, detectives had been investigating Lewis, her husband Stephen, a police sergeant, and his identical twin brother Stuart, an inspector. Alison and Stephen were both arrested, and spent months as suspects. Stuart, who was the first senior officer to reach the murder scene, was arrested on suspicion of perverting the course of justice.

None of the Lewises was charged, but Stuart still faces disciplinary proceedings. A police inquiry into his behaviour, the conclusions of which The Observer has seen, found he could not account for his movements at the time of the murders, although he had been on duty. He did not write about this in his notebook until two days later, and even then parts of it appeared to have been altered.

The report found that when Stuart got to the scene, firemen and paramedics told him that the victims had not died as a result of the fire, but had been attacked. The bodies, which were outside the house, were covered in blood.

Yet instead of telling his control room and senior colleagues that there appeared to have been a mass murder, and setting a homicide inquiry in motion, Lewis disappeared for an hour. As a result, the house was not secured, and valuable time for the start of forensic inquiries lost.

The force realised the seriousness of the crime only when other night duty officers who had been at the scene returned to their base at the end of their shift. Lewis gave the internal inquiry an account of his whereabouts after he went to Clydach, but according to the report, what he said was untrue.

Morris's trial heard that on the night of the killings a witness, Nicola Williams, saw a man walking from the direction of Mandy Power's house, carrying a bag. Williams looked at him closely, she said, and thought he was wearing what looked like a police jacket.

She produced an E-fit, which looks like Stephen Lewis. Fifteen months later, she picked out the sergeant on an identity parade. The judge told the jury to disregard this, however, because Stephen had an alibi: that he was in bed with his wife, Alison.

And the jurors were not told that the E-fit looked even more like Stephen's twin, Stuart, and that he could not account for his movements that night.

It is, says Morris's solicitor, Danny Simpson, extraordinary that Stuart Lewis did not give evidence. It is likely, he says, that the prosecution did not wish to call the inspector because it knew the disciplinary report would then have been shown to the court.

Yet the defence made no protest. It allowed the jury to be told that Stuart's conduct was 'calm and efficient', though it had seen the report and should have known this claim was untrue.

Why might that have been? Morris's grounds of appeal claim: 'His trial was unfair because his solicitors had a conflict of interest.' Surprisingly, Morris's solicitor, Dai Hutchinson, had spent months representing both the Lewis brothers when they were suspects. The grounds claim that as a result, he failed to present evidence which would have been favourable to Morris.

Hutchinson has declined to speak to The Observer, but in a letter to the Court of Appeal he denies he had such a conflict, saying he was careful to ensure that Morris was happy about the fact he had already represented the Lewis brothers, and that he checked with the Law Society's ethics department. By the time Morris was charged, he said, he had stopped acting for the Lewises.

Other important evidence was not given by the defence, say the grounds of appeal. For example, Stephen Lewis repeatedly insisted he did not know of his wife's lesbian affair until after Power's death.

Yet Hutchinson had the disciplinary report, which contained statements from two witnesses saying Stephen had known about it. If these people had been called, they could have backed testimony from Power's neighbour, Louise Pugh, who told the court she had heard Stephen threatening Power in the weeks before the killings, telling her to 'stay away from my wife, or I'll kill you'. Stephen Lewis denied this.

The report added that early in the investigation at least one detective leaked information to Stuart Lewis. Last week, Phil Lloyd, who is representing the Lewis brothers for the Police Federation, said neither had any comment to make. He said Stuart would vigorously defend himself against any disciplinary charges, and that he disputed the conclusions of the internal report.

Meanwhile, a new forensic study commissioned by The Observer reveals a possible inconsistency in evidence given by Alison Lewis. She told the court she had not seen Power on the night of the murders, although they had sex early the previous morning.

Yet samples taken from Mandy's thighs found traces of Alison's DNA, suggesting they might have had more recent contact. Several witnesses also said Mandy, who had the skin complaint psoriasis, bathed often, and a relative who saw her the evening before she died said she was freshly showered.

The prosecution agreed that washing would have removed Alison's DNA. It explained its presence by the fact that a vibrator was found inside her body. Alison testified that she had used this herself just once, six months earlier. The prosecution said the remains of Alison's dried bodily fluids might have 'flaked off' the vibrator and stuck to Mandy.

An analysis carried out for The Observer by the Manchester-based forensic science consultancy Hayward Associates was prepared from the original laboratory notes and crime scene reports. Could Alison's DNA have stayed on the vibrator for six months? Not, says the report, if the vibrator had been washed; nor if 'Power had repeatedly used the vibrator in the intervening period'.

So did Power use the vibrator regularly? The only evidence comes from Lewis's own testimony. She told the court that Mandy frequently said she was using it as they talked on the phone.

Alison Lewis told The Observer: 'I never actually saw her using it. She only ever told me she was using it on the phone. I don't know if she actually was.'

Since his conviction, Morris has developed diabetes. It has not been an easy sentence. 'On my first day on remand a screw asked if I wanted a shower,' he says. 'I went down there and had the living daylights kicked out of me.'

His mind goes back to the night of the killings and his fateful walk towards his parents' home. Why didn't he simply visit Mandy? I ask. The reply pours out with spontaneous vehemence: 'Visit Mandy? At night? I would never have done that. It would have been far too dangerous. Because the kids were there, weren't they? And her kids were friends with Emma, Mandy Jewell's daughter. I would never have taken that risk.'