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Last Updated: Tuesday, 30 January 2007, 18:49 GMT
What Levy arrest means for Blair
By Nick Assinder
Political correspondent, BBC News

Suspicions that the police have widened the cash-for-honours investigation have been dramatically heightened after Tony Blair's fundraiser Lord Levy was arrested for the second time.

Lord Levy
Lord Levy arrest takes police probe further
The big difference this time is that the prime minister's friend and Middle East envoy has not been questioned over the original claims about offering peerages in return for party funds.

This time he has been arrested on suspicion of conspiracy to pervert the course of justice. Just 10 days ago the prime minister's close Downing Street aide Ruth Turner was arrested and questioned on suspicion of perverting the course of justice

And that suggests police have now broadened their inquiry to cover the possibility that they have been prevented from properly carrying out their investigations.

In other words, just as was the case with Watergate - as Liberal Democrat Edward Davey has suggested - there may have been a cover-up.

And, just as it was with Watergate, it may be the cover up - if there was one in this case - that could prove most damaging.

Provide evidence

The latest development comes only days after allegations there was a secret email system inside Downing Street - something angrily and repeatedly denied by the prime minister's official spokesman.

Ruth Turner
Ms Turner was arrested on similar charges
He told political reporters on Tuesday morning: "You really have to start questioning whoever is supplying you with this information because it is wrong".

He added there was only one system inside Downing Street and that "the police have had complete access to all such transactions".

There had been some suggestions that police had not been provided with all the documentation they had requested, and that some had even been destroyed.

Downing Street is robustly denying any such suggestion and has directly challenged reporters to provide evidence.

But the latest development has now added to the feeling that this investigation, far from going nowhere, is becoming even more serious and wide-ranging.

Overly dramatic

Tony Blair continues to refuse to make any comment on the probe whatsoever, telling the BBC's The Politics Show last Sunday that it should take its course.

Tony Blair
Mr Blair has refused to comment on investigation
However some senior figures, including former Home Secretary David Blunkett attacked the police for the "theatrical" way they arrested Ms Turner.

And throughout the investigation there have been complaints from friends of those involved that the police have behaved in an overly dramatic way.

Others, however, believe the man in charge, Metropolitan Police Assistant Commissioner John Yates, has been scrupulous in the way he has led the inquiry.

What seems certain, however, is that this affair - which has already thrown a long shadow over the prime minister's final months in power - is not about to evaporate.

Indeed, there are those now speculating that there is a real chance that charges will finally be laid against individuals at the centre of the investigations.

Many still doubt that, claiming the police are simply doing their job. And all those involved had persistently denied any wrongdoing.

But if that unprecedented event does take place it will see Mr Blair's 10 year reign ending on one of the most damaging notes possible.

How the investigation has progressed

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