Police investigating the cash-for-honours affair intend to question the Prime Minister within a month, it was revealed last night.
Tony Blair could be questioned under police caution, or could be a "significant witness" in the inquiry.
As the police investigation into donations to the Labour Party widened yesterday, a senior Whitehall source said the prospect of charges was "in the balance". "It's 50-50 at the moment," the source said.
Police are understood to be ready to hand files to the Crown Prosecution Service in the next six to eight weeks. Plans to question Mr Blair have been delayed because Lord Levy, Labour's chief fundraiser, and his lawyers have been offering no comment to questions posed by Scotland Yard detectives, it is understood.
In the next six weeks detectives are expected to interview many of the remaining donors, a Whitehall source disclosed.
"They are going to work their way through all the suspects," the source said.
Sir Christopher Evans, a leading figure in the biotechnology industry who was arrested by police on Wednesday, said he was "extremely shocked and dismayed" and would never have loaned money to the Labour Party if he had known what would happen.
Sir Christopher is the third person held by police investigating claims that potential backers were promised peerages in exchange for their support, which is illegal under a law passed in 1925. He described his arrest as "mind-boggling" and vehemently denied that he has done anything wrong.
But the Scottish National Party MP Angus MacNeil, whose complaint set off the police inquiry, said: "This is a significant development and again justifies my decision to report this matter to the police. Let us not forget that, in total, 80p of every £1 of individual donations to the Labour Party come from people who have been honoured."
Lord Levy, who was arrested during the summer, has retained Mr Blair's confidence despite the allegations, and was involved in the Prime Minister's three-day visit to the Middle East earlier this month.
Sir Christopher, who was bailed late on Wednesday, said: "I voluntarily attended the police interview and have always been happy to provide the police with any information they have requested. There was nothing raised in the interview that caused me or my solicitor any concern or to think that I have done something wrong. I have done nothing wrong and have absolutely nothing to hide."
His solicitor, Neil Micklethwaite, added that Sir Christopher had not been charged with any offence.
A television documentary to be screened next week will claim Lord Levy blocked moves to publish the names of big Labour donors from the past.
A former Downing Street aide, Lance Price, tells Channel 4's Dispatches that the peer was "apoplectic with rage" at the proposal and went to the Prime Minister who backed him up. The alleged row happened before the Government introduced laws to disclose the names of major donors.Reuse content