Twice-arrested Blair aide to quit Downing Street post

Published on Thursday 24 May 2007 00:20

LORD Levy, the Labour fundraiser at the heart of the "cash-for-peerages" affair, last night announced that he will quit Downing Street along with Tony Blair.

The peer is the Prime Minister's personal envoy to the Middle East, but has also played a central role in Labour's fundraising for several years and is sometimes known as "Lord Cashpoint".

In his Labour role, he helped arrange more than 14 million in loans to the party before the last general election in 2005. The loans were kept secret until last year.

Some of the lenders were later nominated for peerages, something that is now the subject of a police inquiry.

Lord Levy was arrested twice during the course of that inquiry. He has not been charged with any offence and denies all wrongdoing.

The Scotland Yard investigators have now passed their findings to the Crown Prosecution Service, which will make the final decision about whether anyone should face criminal charges.

It has been reported that the police inquiry work is most closely focussed on the actions of Lord Levy and two senior Downing Street aides, Jonathan Powell and Ruth Turner. John McTernan, another No 10 aide and the mastermind of Labour's Holyrood election campaign this year, was also questioned. All deny wrongdoing.

Mr Blair will formally resign as prime minister and hand over to Gordon Brown on 27 July. Lord Levy will quit on the same day, it was confirmed last night.

Mr Blair was also questioned by the police during the "cash-for-peerages" inquiry, the first serving prime minister ever to face such scrutiny.

Although the Prime Minister has insisted he takes personal responsibility for all Labour's fundraising activities, he was not interviewed under caution and is highly unlikely to face charges.

Lord Levy is said to have been uneasy about using loans to fund Labour, but went along with the idea at Mr Blair's urging. He has told friends that in the event he should face charges, he will be willing to incriminate other senior Labour figures.

The Scotland Yard inquiry into Labour's fundraising was triggered partly by a formal complaint from Angus MacNeil, the Scottish National Party MP for the Western Isles.

Last night, Mr MacNeil raised the question of a connection between the police inquiry and Lord Levy's decision.

"The question Lord Levy has to answer is whether his decision to step down has anything to do with the cash-for-peerages inquiry," he said.

"Only Lord Levy can say why he has chosen to step down and to make his announcement at this point.

"The police file has now been passed to the Crown Prosecution Service, and we are all wondering whether that has played a role here."

Edward Davey, chief of staff to Sir Menzies Campbell, the Liberal Democrat leader, said Mr Blair and Lord Levy had worked "so closely together and so many things were inseparable".

He added: "With Lord Levy gone, the challenge will be for Gordon Brown to clean up the mess left by the cash-for-peerages scandal and restore the public's faith in the political process."

Despite the connections some chose to draw with the police inquiry, Labour insiders last night insisted that Lord Levy's announcement was simply part of a wider process of Mr Blair's inner circle preparing to abandon Downing Street with the Prime Minister.

A Downing Street spokesman last night downplayed Lord Levy's announcement.

"This is a non-story. It was always understood that Lord Levy would stand down when the Prime Minister does," he said.