Levy arrest 'integral' to probe

Lord Levy is a close friend and colleague of Tony Blair

The police officer heading the "cash for peerages" inquiry has told MPs the arrest of Lord Levy was "integral" to the probe - and not a "symbolic" move.

Deputy assistant commissioner John Yates said the arrest had enabled police to seize documents they needed to pursue their enquiries.

Speculation has been mounting that Tony Blair may be quizzed by officers.

It follows the arrest and questioning on Wednesday and Thursday of fundraiser Lord Levy. He denies all wrong-doing.

As he left a north London police station, Lord Levy told the large crowd of reporters and television crews: "I will now carry on with my usual activities and my usual role in life.

"I have been helping the police with their inquiries. My solicitor will be making a statement later on today."

He continued: "I can't say anything else further than that, so thank you very much and I hope you respect that."

'Serious investigation'

The further questioning of Tony Blair's chief fundraiser came as the police officer heading the "cash for peerages" probe briefed MPs in the House of Commons on the progress of the investigation.

Although it may be dodgy, is it illegal? Tony Wright Commons public administration committee explains what the police are trying to establish Analysis: How bad for Blair? Q&A: Cash for peerages affair

Mr Yates met the Commons public administration committee in private for just over an hour.

Mr Wright, the Labour chairman of that committee, said afterwards he had been keen to "repudiate" claims, such as one from former Home Secretary David Blunkett, that Lord Levy's arrest had been a "theatrical" move.

Mr Wright said the impression he had was that it was a serious investigation.

However, he added: "I don't think it was clear yet to any of the people involved whether it would lead to prosecutions or not."

He said the police were trying to work out "whether although it may be dodgy, is it illegal".

Mr Yates had refused to say whether Mr Blair would be interviewed, said Mr Wright, but told the MPs that the police "will go wherever the investigation leads".

Lessons

Mr Wright said the MPs were told police had so far interviewed 48 people, 13 of them under caution.

They were also told three people had yet to agree to be interviewed by police.

He said the police had stressed that the inquiry was covering both the main parties, and said more Conservatives had been interviewed than people from Labour.

"They expected to be able to bring their investigations to a conclusion by the autumn, certainly by October, and the CPS would make it a priority then to decide whether this was going to go any further.

"And finally, the police said whatever the outcome of this investigation, they'd be very happy to share the lessons of it with us, and to do that in public evidence session," Mr Wright told reporters.

Lord Levy's arrest came two days after it emerged that he advised curry tycoon Sir Gulam Noon he need not tell a Lords vetting watchdog he had lent Labour £250,000.

Just how big a political bombshell is Lord Levy's arrest? BBC political editor Nick Robinson Read Nick's analysis in full Profile: Lord Levy

Police are investigating all the main parties to see whether people have been given honours in return for making financial donations.

The investigation was launched after it emerged that some people nominated for peerages by Mr Blair had given large secret loans to Labour last year.

All concerned deny any wrongdoing. The rules on political funding meant that loans on commercial terms did not need to be disclosed publicly.

Public confidence

A Labour spokesman said the party "has, and will, continue to co-operate fully with this police investigation and, because of the ongoing nature of the investigation, we will not be commenting further".

Scottish National Party leader Alex Salmond, whose party originally called for the cash-for-peerages investigation, claimed the water was now "lapping around the prime minister's feet".

Amid the controversy, MPs have called for changes to the rules on awarding peerages and other honours to restore public confidence.

The public administration committee's report says those nominated to the House of Lords should disclose all financial support given to political parties or government projects.