Police investigating British political party funding questioned the chief fundraiser for Tony Blair's ruling Labour Party today amid growing speculation that the prime minister may soon be questioned by detectives.
Tony Blair
Police sources confirmed that Lord Levy, arrested yesterday and then released on bail without being charged, had returned to a London police station to be interviewed again.
Police are investigating allegations that state honours were awarded in return for cash in an escalating row that has damaged Mr Blair's standing and increased calls for his resignation.
Deputy Assistant Commissioner John Yates, who is heading the police invetigation, gave an update on his investigation today to members of parliament on a committee which scrutinises the government.
Committee chairman Tony Wright said Yates had told them that almost 50 people had been interviewed so far, the majority from the opposition Conservative Party.
Three people had refused to be interviewed and committee members said these were lenders to the Labour Party.
Michael Levy (62) has denied any wrongdoing and accused the police of using their arrest powers "totally unnecessarily".
"The waters are lapping around the prime minister's ankles," Scottish nationalist leader Alex Salmond said after the arrest.
Mr Blair faced a barrage of damaging headlines about the row reaching the door of his Downing Street residence.
"Blair faces police quiz," said the Sun newspaper. "Police quiz Blair next," declared the Daily Mail newspaper.
MORI pollster Robert Worcester told Reuters: "I think it is one of the many nails in Mr Blair's coffin.
His authority is dissipating day by day and his loyalists are fewer and fewer. The Praetorian Guard is being depleted."
After Lord Levy's arrest, bookmakers William Hill slashed their odds on Blair quitting this year to 2-1 from 11-4.
Mr Blair, who has led Labour to three election wins in a row, has said he will not stand for a fourth term.
Labour came under pressure after it said it had received £14 million in loans from 12 businessmen, some of whom were nominated for seats in the unelected upper house of parliament.