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Last Updated: Tuesday, 18 April 2006, 10:16 GMT 11:16 UK
Head denies cash for honour claim
House of Lords
The loans for peerages row is under police investigation
The headmaster and ex-government adviser arrested as part of the cash for honours probe will deny allegations against him, his lawyer said.

Des Smith was arrested and bailed last week over claims in a Sunday newspaper that he said donations to city academy schools could lead to an honour.

But speaking on his behalf, his solicitor said Mr Smith would vigorously contest the allegations.

Scotland Yard released him last week "pending further inquiries".

The 60-year-old had been held for questioning under the 1925 Honours (Prevention of Abuses) Act.

In January, he had apparently suggested sponsors for the government's flagship city academies programme could be given honours in exchange for funding.

Levy-headed body

Mr Smith later quit his post with the Specialist Schools and Academies Trust.

The trust helps the government recruit education sponsors.

Set up in September 2005, its president is Lord Levy, Tony Blair's chief political fundraiser and close friend.

Mr Smith's solicitors, London law firm Hughmans, said he had been approached for interviews and they had advised him that "in the light of the police investigation it would be quite inappropriate for him to make any statement at the present time other than to state he categorically denies the allegations and will be contesting them vigorously".

"We would ask that the press respect our client's and his family's privacy and any further statements will be released through these offices."

He reportedly told the Sunday Times that "the prime minister's office would recommend someone like [the donor] for an OBE, a CBE or a knighthood".

'Fantastic head teacher'

Downing Street said at the time it was "nonsense to suggest that honours are awarded for giving money to an academy".

Mr Smith remains headmaster of the All Saints Catholic School and Technology College, Barking and Dagenham.

Local Labour MP Jon Cruddas told the BBC Mr Smith had greatly improved results at the school and should be judged on his "21 years as a significant local public servant".

"He is a fantastic head teacher," he added.

The cash-for-honours inquiry was originally launched in response to a complaint by Scottish and Welsh nationalist MPs that Labour had broken the law preventing the sale of honours such as peerages and knighthoods. It has since been widened to cover the activities of other parties.

The investigation is being led by Deputy Assistant Commissioner John Yates, who has said he is prepared to widen the investigation to consider more general allegations of corruption.

It followed reports that the House of Lords Appointments Commission had blocked the appointment of four of Prime Minister Tony Blair's nominations for peerages - all wealthy businessmen who had made loans to Labour.

None was on the list of new working life peers when it was published on Monday. One Tory nominee - who had loaned the party 2m - also missed out on a seat in the upper house.

Mr Yates has already told MPs that he is prepared to widen the investigation to consider more general allegations of corruption.

Unlimited fine

The Specialist Schools and Academies Trust describes itself as the "leading national body for secondary education in England, part funded by the DfES (Education Department), delivering the government's Specialist Schools and Academies programme.

Anyone found guilty under the 1925 Honours (Prevention of Abuses) Act - designed to deal with those who both give and accept honours under inducement - could face imprisonment for up to two years or fined an unlimited amount.

The Act was introduced after the scandal of the early 1920s when David Lloyd George was offering peerages and lesser honours at a price.

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