Political misfortunes continue to accumulate for Tony Blair. The latest one, the arrest for questioning of his chief fundraiser and close friend Lord Levy in the police investigation into whether businessmen gave loans to the Labour Party in return for the promise of peerages, is deeply damaging. It brings this scandal to the threshold of No 10 Downing Street, as rumours circulated yesterday that Mr Blair himself may now be questioned.
It seems to bear out other impressions of sleaze and corruption at the heart of the New Labour establishment, mocking Mr Blair's remark in 1997, just as he took office for the first time: "We have got to be whiter than white to rebuild trust". Mr Blair is pledged to retire as prime minister before the next election.
He regrets having made the promise but will have to adhere to it. The only question is whether he goes sooner rather than later. Personally he wants to see several keynote policy initiatives delivered upon before he departs. Even those keen to hasten that day know it would be best that he is not forced out of office by an affair like this, for the good of the party's reputation.
At its heart is the question of how political parties should be funded. The highly secretive operation run with Lord Levy relied on seeking loans from rich donors rather than direct donations in the run-up to last year's general election.
Four of those involved were subsequently turned down for peerages - but the police inquiry revolves around whether they were offered them in return for the loans. Mr Blair much prefers the leadership discretion this flexible system gives him to the more accountable system of contributions, whether from individuals or trade unions. Party officials are furious, not least Labour's treasurer, who knew nothing about it.
The police investigation is based on legislation passed in 1925 which makes it illegal to offer honours for money, following a round of notorious scandals then. The issue has remained murky in the British class and status system - irrespective of which party is in power. Significantly, the police investigation is directed at the Conservatives and Liberal Democrats as well as Labour.
But the Labour Party stands to lose most from this affair which tarnishes its reputation for straight dealing and seems to symbolise a succession of ministerial scandals involving personal failings. Lord Levy is reported to favour a much greater involvement of the state in funding political parties, as an alternative to this system of grace and favour. A similar conclusion was drawn by political leaders here in recent years.