Scotland Yard will broaden its "loans for peerages" investigation to cover the Conservative party as well as Labour, the Guardian has learned.
The Metropolitan police team, led by the deputy assistant commissioner John Yates, has already requested documents and e-mails from Downing Street, the Cabinet Office and the House of Lords Appointments Commission.
But the range of the inquiry means that the Conservative party's loan arrangements will also have to be investigated. Tory sources admitted on Tuesday that the total amount raised by the party last year in loans was £24 million (US$42 million), and it is understood the party's high command has privately asked the contributors to go public.
Scotland Yard has refused to say which figs the detectives intend to interview as the inquiry unfolds, but it will not rule out speaking to Prime Minister Tony Blair. Westminster sources believe they will almost certainly speak to Lord Levy, the prime minister's chief fundraiser, and key players, such as the Labour Party Chairman Ian McCartney.
The members of parliament (MPs) who made the initial complaint about Labour and loans met Yates and his team of six at Scotland Yard yesterday to discuss the inquiry and to hand over a dossier fleshing out concerns.
After the meeting the Scottish Nationalist MP Angus MacNeil said: "The police are interested in crime. They are not interested in which party committed it ... After meeting people at Scotland Yard I would say anyone who has been involved in the selling of peerages should be shaking in their shoes."
MacNeil said he had been told the Tories would also be investigated.
A letter from Scotland Yard to the Public Administration Committee, which is also investigating Labour's loans, revealed that the Metropolitan Police had not ruled out pursuing charges of corruption.
"Whilst it may be too early for us to widen our investigation into the arena of corruption, I certainly have not ruled this out," wrote Yates. "I have indicated to you that many of the individuals that you wished to hear evidence from may be the very people that could be central to our criminal inquiry, either as witnesses or suspects."
Yates has urged the committee to stall its inquiry.
"My concerns were that your scrutiny could be viewed as an abuse of process in terms of fairness in any future potential criminal trial," the letter explains.
"I have consulted closely with senior lawyers from the Crown Prosecution Service about this matter," he wrote. They share my concerns and are happy for them to be articulated in this letter."
The Labour chairman of the committee, Tony Wright, insisted yesterday that his inquiry would continue regardless.
"There is no question that we shall proceed with the inquiry," he said. "In fact we shall widen it and call more people and we are prepared to summon people if they decline to attend in future."
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