In a move promised in the SNP's election manifesto, Kenny MacAskill, the justice secretary, said he hoped the inquiry would lift the "cloud of suspicion and uncertainty" which has hung over the Scottish criminal justice system for more than a decade.
The inquiry will be chaired by Lord Justice Campbell, who will report on how any "shortcomings" can be avoided in future. It will not "try or retry" individuals involved, or challenge the decisions of prosecutors, defenders, or the courts, but Mr MacAskill said the inquiry will "open up and understand" events.
The Scottish Government and the Lord Advocate, Elish Angiolini, will hand over any material that might be useful to the inquiry. If requested, ministers and prosecution and government officials, would appear in person.
Mr MacAskill said: "Previous reviews helped to shed some light on matters, but they have not fully explained the events.
"Public concern remains. This is not an issue we can allow to wither on the vine – unless we are prepared to allow public confidence to wither with it."
However, Tory justice spokesman Bill Aitken asked: "Is it not time to move on? Miss McKie has had her compensation, issues of fingerprint management have been addressed and while there are certainly questions to be asked of the previous executive, they are now out of office."
In 2000, Lord Justice Campbell's chaired an inquiry into the decision-making process in the prosecution of three men accused of the murder of Surjit Singh Chhokar.
He said: "I intend that this inquiry will be both rigorous and fair in dealing with issues and individuals arising from the Shirley McKie case."
Ms McKie's father, Iain, said his daughter did not want the public inquiry, as she was so traumatised by the events of the past 11 years. "If the politicians and the judiciary don't get this right, so be it – I will certainly be walking away from it once this inquiry is finished," he said.
SNP MSP Alex Neil, who has campaigned for justice for the McKie family,
said he hoped the inquiry would cause "upset" within the Scottish Police Services Authority, which is responsible for the fingerprint service.
A SERIES OF CHALLENGES
SHIRLEY McKie denied leaving her fingerprint at the Kilmarnock home of murder victim Marion Ross in 1997, while a serving policewoman.
Accused of perjury, she lost her job with Strathclyde Police. She challenged the findings of fingerprint experts working for the Scottish Criminal Record Office (SCRO) and was cleared of perjury in 1999.
She was awarded 750,000 in an out-of-court settlement in February 2006 after suing the former Scottish Executive and the SCRO.