BRITAIN: British prime minister Tony Blair's chief fundraiser and confidant Lord Levy was arrested for a second time yesterday on suspicion of perverting the course of justice over his role in the cash for honours affair.
The dramatic development suggests Lord Levy, who answers directly to Mr Blair, is suspected of allegedly lying or withholding evidence from detectives as part of a cover-up. Police are known to be following a trail of encrypted e-mails and electronic trails on computer hard-drives as part of their 10-month inquiry.
Scotland Yard detectives, who are investigating whether money was donated to the Labour Party in exchange for peerages, placed the peer under arrest when he went to a central London police station to answer bail yesterday.
Perverting the course of justice involves attempts to put obstacles in the way of police. It is considered an extremely serious offence by the courts. The maximum jail penalty is life although in practice no one has ever been jailed for more than 10 years in the last century.
A spokesman for Lord Levy said he "completely denies any allegations of wrongdoing whatsoever. Lord Levy went to the police station today as asked. He was interviewed again. He left the police station in the early afternoon and since there is a continuing investigation he will not make any further comments at this time." The peer was released on bail last night pending further inquiries.
Government sources were also bullish about the development. As pressure mounted on Mr Blair, senior ministers expressed anger and frustration about the length of the police investigation and a belief that it is time to put up or shut up.
A government source said: "This has now been going on a year and questions need to be asked whether there is or isn't sufficient information." Scotland Yard has, however, repeatedly defended the integrity of its inquiry.
Downing Street refused to comment on Lord Levy's re-arrest, but the development will heighten speculation that Mr Blair - who has already been questioned as a witness - may be seen again by detectives before they conclude their inquiry.
Lord Levy (62) was first arrested in July last year and questioned under the Honours Act 1925 and the Political Parties, Elections and Referendums Act 2000. Food tycoon Sir Gulam Noon, who was originally nominated for a peerage by Labour, has alleged to police that Lord Levy suggested he make a loan to the party in the run-up to the 2005 general election and that it need not be disclosed.
Lord Levy was questioned again in September last year and denied any wrongdoing.