Cash-for-honours investigator complains of political interference

The senior Metropolitan Police officer at the centre of the aborted £1m inquiry into "cash-for-honours" allegations inside Downing Street was put under intense pressure by high-level political figures before the case was dropped, he said yesterday.

Assistant Commissioner John Yates told the Commons public administration select committee that his 16-month investigation was obstructed by a lack of co-operation. But he insisted that the pressure exerted on him during the course of the inquiry did not influence his decisions.

He said the Cabinet Secretary, Sir Gus O'Donnell, co-operated "in full" but added: "Others did not. It would be quite obvious to everybody who that was."

Mr Yates said he had received letters from lawyers of some of the main players in the inquiry before yesterday's hearing, warning him against divulging information to the MPs that was gained during the police investigation. He confirmed, however, that a diary by the biotechnology entrepreneur, Sir Christopher Evans, and a note by Ruth Turner, Tony Blair's "gatekeeper" at No 10, was "crucial evidence" which "led us down another path", leading to the inquiry being extended.

The Evans diary is alleged to have included a note of a conversation with Lord Levy, Labour's chief fundraiser, discussing a "P" or a "K" (a peerage or knighthood). Both men denied any wrongdoing and, although they were arrested, no charges were brought before the Crown Prosecution Service ordered the case to be dropped.

Defending his dawn arrest of Sir Christopher, Mr Yates brushed aside MPs' protests that No 10 aides were subjected to an ordeal and "hung out to dry". "It was not just me going off on a wild goose chase," he said. "It was not great fun. It was bloody difficult."

His team received "less than full co-operation", said Mr Yates. "I don't say that now in the sense that it was deliberate in its intention but I think there was a sense they thought we would ask questions, get some answers and simply go away. That is not how the police work." He added: "People under suspicion in those kind of cases will try to hide evidence."

The inquiry was launched in March 2006 after the Scottish National Party made a complaint of corruption, following press reports that 12 millionaire businessmen made undisclosed loans totalling nearly £14m to the Labour Party for the 2005 general election campaign, and some had been put on a list for political peerages by Mr Blair. It was only in January this year that Mr Yates discovered how the list had been put together, he said.

"I felt uncomfortable on a number of times," said Mr Yates. "It was a difficult investigation with immense public scrutiny [and] some fairly dark comments by politicians who should have known better. Was it improper pressure? No – I don't think so. Would it have made any difference? No, I think not ... I want to assure the committee that at no time did that pressure influence me in my decisions." He added: "We were treated as a political problem, not a criminal problem."

The questioning follows reports that Mr Blair had warned police he could be forced to resign if he became the first serving Prime Minister to be arrested or questioned under caution.

However, Mr Yates refused to go into details of the dossier he submitted to the CPS before the investigation was dropped owing to insufficient evidence. Mr Yates, regarded as one of the brightest detectives in the Met before the inquiry, was asked if his career had been damaged. "I will leave it to others to judge," he said. His remarks will infuriate MPs who believe his inquiry was a waste of time and taxpayers' money.

Tony Wright, the Labour chairman of the committee, said Mr Yates's criminal investigation had damaged the MPs' inquiry but the panel would report before the end of the year. It will not be taking evidence from Lord Levy and Ms Turner. The Criminal Law Commission is due to report on reform of the anti-corruption laws and the MPs are likely to recommend a tougher regulatory role by the Electoral Commission. There may also be pressure to update the Honours (Prevention of Abuses) Act 1925, which was tightly drawn to prevent prosecutions without hard evidence of agreement on the sale of honours.