Cash for honours inquiry homes in on Blair aides

LORD Levy and some of Tony Blair's closest aides face further questioning in the "cash-for-honours" saga as Scotland Yard detectives prepare to present their report to prosecutors.

Former Labour chairman Ian McCartney - Blair's favourite fundraiser - along with former party general secretary Matt Carter and a series of Downing Street aides, are understood to have been included on a 'final' list of witnesses deemed worthy of further investigation.

Their likely inclusion in the report to the Crown Prosecution Service (CPS), along with Blair aides Ruth Turner and John McTernan, raises the possibility that they might face charges under legislation banning the offer of honours in exchange for material gain.

But the report into allegations that honours were offered for financial support to Labour is expected to rule out further inquiries into Blair himself and a series of tycoons who lent millions of pounds to the party.

Detective Chief Inspector Graeme McNulty, who quizzed Blair in Downing Street last week, demanded further details of all the named individuals from the Labour party hierarchy late last week, as the police team finalises its report into the potential for further action.

"There is a list and it is about to be set in stone and sent to the CPS," a source close to the police investigation said last night. "Blair isn't on it, but it may be more interesting to focus on who is on it. These people have effectively got an asterisk against their names, suggesting that the police strongly believe it would be valuable to investigate their actions further. That is a powerful recommendation to put before the CPS."

A Downing Street insider last night said the figures at the centre of the inquiry had yet to be told whether or not they would be questioned again or reported to the CPS.

The source said: "They are not worried, as such. We don't feel they did anything wrong or criminal, so they feel rather robust about this.

"The investigation was supposed to be finished by the end of October, then it was December. Now it looks like they will pull it together in January."

The source added: "The fact that the cops are still interested in four or five people does not

mean that the CPS will be interested in pursuing them." Blair's allies had hoped that he was in the clear after nine months of inquiries, following a police decision not to interview him under caution, and his choice not to have a lawyer present during their session.

The Prime Minister insisted that the honours in question had been "nominated by me as a party leader for party service, in the way that other party leaders are entitled to do".

But any initial relief felt by Blair will be tempered by the knowledge that the prospect of further action against some of his closest aides might spark an unprecedented round of feuding within his inner circle.

Levy is believed to have made clear his intention to ensure he does not carry the can for the "cash-for-honours" saga, amid reports that the focus of the inquiry would switch back to his role following Blair's interview. It was claimed yesterday that Levy may have asked Sir Christopher Evans, who loaned the party £1m, whether he wanted a knighthood or peerage.

The BBC said notes made by about conversations with Levy suggest Evans was asked if he wanted a "K or a big P", although Sir Christopher's spokesman denied the offer of an honour for cash was made.

McNulty asked Blair about the notes of the alleged conversations. In an interview with Scotland on Sunday this year, former pop promoter Levy insisted that he, Blair and Carter had reluctantly agreed to accept secret loans from party supporters.

As the furore over alleged links between donations, loans and nominations for peerages has escalated, he is believed to have told friends that only the Prime Minister could sign-off honours.

The stance threatens a damaging rift, with Levy's word pitted against Blair's.

The destructive potential of the inquiry was demonstrated by Chancellor Gordon Brown's furious response to claims that he sought honours for two friends, businessman Sir Ronald Cohen and Wilf Stevenson, a director of the Smith Institute.

The Treasury accused others of trying to smear Brown by dragging him into the scandal. His spokesman said: "At no point, until loans were made public, did the Chancellor have any knowledge of any loans to the Labour party."

Off the hit-list

WITH one bound he was free. It is only three days since Tony Blair became the first serving British prime minister to be questioned by police during an investigation, but now it appears the humiliation is to be replaced by blessed relief.

Downing Street has maintained from the start of this affair that Blair had done nothing wrong and, finally, it looks like the police agree.

When the Scotland Yard report finally reaches the Crown Prosecution Service, it does not appear that they will be demanding Blair's presence in the dock.

After yet another of his 'worst weeks in politics', it appears that this lame prime minister's luck may at last be changing.

Or maybe not. Blair will take a great deal of satisfaction if, as expected, he does not appear on the Yard's "hit list" of candidates for further inquiries, particularly given the pasting he has taken from opposition politicians over the last nine months.

But the names that are likely to appear on the list may give him more sleepless nights.

The prospect of so many of his closest aides facing further inquiries will ensure that the cash-for-honours saga will remain a live issue for the Prime Minister during the remaining months of his leadership - and perhaps beyond.

Who knows what the further investigations could reveal about life in the Blair bunker, particularly when the ultimate wildcard - Lord Michael Levy - is making it increasingly clear that he does not intend to carry the can for any wrongdoing.