BRITAIN:The summer depression enveloped David Cameron's Conservatives yesterday as prime minister Gordon Brown passed his first byelection tests and saw the Liberal Democrats push the Tories into third place in Sedgefield and Ealing.
To compound the gloom in Conservative campaign headquarters, the diverting news of the long-awaited Crown Prosecution Service statement served only to leave former prime minister Tony Blair and his close aides in the clear over the alleged "cash-for-honours" scandal.
The head of the organisation's special crime division, Carmen Dowd, brought the 16-month, £1m inquiry to an end with the simple declaration: "Having considered all the evidence in this case I have decided that there is insufficient evidence to provide a realistic prospect of conviction against any individual for any offence in relation to this matter."
Angus Macneil, the Scottish National Party MP who sparked the original police probe into suggestions that Labour had traded peerages for secret loans, described the announcement as "quite extraordinary". Metropolitan police assistant commissioner John Yates immediately defended his "thorough and meticulous" investigation against an expected chorus of Labour complaint that the affair had unfairly damaged and tainted Mr Blair's final period in office.
Lord Levy, Mr Blair's chief fundraiser and one of four people arrested during the inquiry, said that, while he did not want to comment on the investigation, he had been "disappointed by constant leaks" to the media which had been "misleading, factually inaccurate and personally damaging".
However, Mr Brown, Mr Blair and the Labour Party moved to draw a line under the controversy. Mr Brown said the police had been right to investigate the "very serious allegations" but now hoped the CPS statement would bring an end to "months of speculation".
Mr Blair declared himself "very pleased" with the outcome, which was as he had "always expected" it would be.
Labour's general secretary, Peter Watt, said: "The decision of the CPS brings to an end a controversial but vitally important inquiry by the Metropolitan Police. Serious allegations were made against leading figures from the two leading parties in British politics and it was absolutely right that the police carried out a thorough investigation of all the evidence.
Mr Watt said the outcome left "an even greater sense of urgency" about the reform of party funding. However, with Labour having led the way in bypassing its own transparency rules by raising secret loans, there is no greater political consensus now on a way forward.
Liberal Democrat leader Menzies Campbell said: "There still remain many questions of political responsibility. This whole affair has diminished politics and politicians in the eyes of the public. Never again must there be any question of any link between preferment and financial support."
In a paper explaining its decision, the CPS explained: "For a case to proceed, the prosecution must have a realistic prospect of being able to prove that two people agreed that the gift, etc, was in exchange for an honour. Such an agreement might be proved either by direct evidence, or by inferences that can be drawn from the circumstances of the case. Such inferences must be so strong as to overwhelm any other, innocent, inferences that might be drawn from the same circumstances. There is no direct evidence of any such agreement between any two people subject to this investigation."
As expected, Labour held both seats in Thursday's byelections with reduced majorities in face of swings to the Liberal Democrats. However, Mr Cameron was the big loser, having invested five visits to Ealing Southall on behalf of controversial candidate Tony Lit. During the campaign it emerged Mr Lit had been photographed with Mr Blair, and that his company had donated money to Labour just days before his selection as Tory candidate.