Police to quiz top Blair aide

Robert Winnett and Dipesh Gadher

Police are to interview Tony Blair’s right-hand man under caution at No 10 as a key suspect in the cash for honours scandal.

The showdown between Jonathan Powell, the chief of staff, and detectives will take place next month after police uncovered e-mails implicating him in the scandal, according to Whitehall sources.

The e-mails are understood to discuss meetings between Blair and Lord Levy, his chief fundraiser, over forthcoming honours lists. They suggest that Levy had a role in the preparation of the lists.

Other senior No 10 aides who will be interviewed under caution are John McTernan and Ruth Turner. The aides, who were sent copies of the e-mails, manage the prime minister’s relationship with the Labour party and the nomination of peers. Being questioned under caution means there is a possibility of charges.

Last week Blair became the first serving prime minister to be interviewed by police undertaking a criminal investigation. Sources close to the prime minister said he was “very pleased” by how the interview, which was not conducted under caution, had gone and that detectives seemed convinced by his answers.

Levy is facing at least his third formal interview under caution in the new year after he was arrested in the summer. His bail was renewed earlier this month.

A Downing Street source said: “The e-mails which the police have obtained talk about the lists and the need for Levy to come in and discuss them with the prime minister. Each time there was an honours list there was a meeting scheduled to discuss it with Levy; Powell was the go-between. The police have got evidence on both men.”

Levy is understood to have conceded that he was party to discussions about the honours list. He is said to have been aware that at least one of the men who loaned the Labour party money was to be nominated for a peerage three months before the honour was formally announced.

However, Levy said that he never contributed any names to the lists nor offered honours to any financial backer, but was simply asked for his opinion on potential peers.

Powell is Blair’s most trusted aide and has served as his chief of staff since 1995. A former diplomat and brother of Charles Powell, Baroness Thatcher’s foreign affairs private secretary, he has been tipped for a peerage in Blair’s resignation honours list.

Among the responsibilities of Turner, Downing Street’s director of government relations, and McTernan, director of political relations, is drawing up potential lists of working peers.

In 2005 both visited Ian McCartney, the then party chairman, in hospital to ask him to sign nomination forms for four financial backers who had been put forward by Blair for peerages. McCartney discovered that the four men had secretly loaned millions to Labour only after it was revealed in The Sunday Times this year.

A source close to No 10 said detectives seemed to have insufficient evidence to implicate the prime minister in the scandal. “It is increasingly clear that Powell and Levy are targets. The previous discussions with Levy have been looking at the nuts and bolts of what went on. The real showdown will be in January,” the source said.

The relationship between Levy and Blair, friends and once tennis partners, is said to have deteriorated since the police investigation began. Both men are on a trip to the Middle East and it is understood that Levy was not told about Blair’s police interview beforehand.

Yesterday Blair refused to comment on Levy’s role. When asked during his Middle East trip about fresh reports on Levy’s conduct, Blair said: “I’ve got absolutely nothing to say. I’m concentrating on this trip and the issues surrounding the future of Israel and Palestine.”

When asked if it was “appropriate” for Levy to continue in his diplomatic role as Middle East envoy, Blair said in frustration: “No matter how many different ways you want to draw me into it, I’m not getting drawn into it.”

Police are understood to be studying a “note”, thought to be diary entries, of meetings between Levy and Sir Christopher Evans, who loaned Labour £1m in the run-up to the last general election. It is thought the police did not ask Blair about the note.

In one entry, Evans, a biotechnology entrepreneur, is said to have written that he was asked if he wanted “a k [knighthood] or big p [peerage].”

Evans’s spokesman said the note long predated the events covered by the cash for honours inquiry and did not necessarily relate to direct talks with Levy or to money changing hands.

Sources said Levy and Evans had discussed the businessman’s political “aspirations” before the scandal broke. These are said to have included the possibility of Evans becoming a peer and replacing Lord Sainsbury as science minister. Evans is the only one of Labour’s lenders to have been arrested in the inquiry.

The No 10 source said: “Evans is a decent, honourable man who also happens to be one of the country’s top scientists. Is it that surprising that he would want to be science minister?”

Evans is understood to have met Levy on numerous occasions since 1997 and friends believe he “ticks all the boxes” when it comes to credentials for becoming a Labour peer.

“It would not be a shock if Blair rated Evans to become a peer at some point in the future,” said one source. “In social conversations, Levy was just speculating that he would be a great science minister, the kind of guy who would be a credit to the government. But Evans is clear that Lord Levy is not in a position to offer anything or deliver anything. There was no quid pro quo with the loan.”

Evans’s spokesman said: “There is no record of an offer of an honour in return for cash because such an offer was never made nor sought.”

Downing Street yesterday declined to comment on the police inquiry and said there was no rift between Blair and Levy.

The Sunday Times revealed earlier this year four businessmen who secretly lent Labour millions of pounds for the last election had been nominated for peerages by Blair. The nominations were blocked by a parliamentary watchdog that vets potential peers.

After his police interview Blair defended his decision to nominate the men — Sir Gulam Noon, Sir David Garrard, Chai Patel and Barry Townsley. “I think it is perfectly natural that the police should come and talk to me,” Blair said. “The particular issues concerned were not for honours given for public service. On the contrary, they were nominated by me as a party leader for party service. That’s the basic distinction that lies at the heart of this.”

However, senior Labour figures have questioned how far the businessmen were committed to Labour beyond their funding.

Pressure is mounting on Lord Goldsmith, the attorney-general, who will ultimately decide whether to bring any prosecutions. He already stands accused of doing Blair’s dirty work: first, over the notorious legal advice justifying war against Iraq; more recently over his decision to stop a fraud inquiry into alleged corruption involving the Saudis.

A friend of Goldsmith said: “He is fed up about having his name dragged through the mud. He is loyal to Blair but at the same time is very conscious of his reputation. He will not hesitate to push ahead with charges if this is the recommendation that comes to him.”