Levy to quit as Middle East envoy

Lord Levy, the Labour fundraiser, is poised to quit as the Prime Minister's personal envoy to the Middle East when Tony Blair leaves office.

He will follow John Reid, Home Secretary, by announcing he will go when Mr Blair steps down in June. But it emerged yesterday that he would be axed if he did not resign when Gordon Brown took over.

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"Levy will go," a senior figure said yesterday. "It's vital because he is seen as somebody who thinks it's Israel, right or wrong." Lord Levy was ennobled after Mr Blairs election victory in 1997 and later appointed as the Prime Minister's Middle East. He has kept actively engaged in behind-the-scenes visits to the Middle East on Mr Blair's behalf in spite of being arrested in the "cash-for-honours" inquiry.

Lord Levy, 61, was arrested on suspicion of perverting the course of justice, and a 216-page dossier was handed by police to the Crown Prosecution Service on 20 April. He denies any wrongdoing.

Born in Hackney, east London, to immigrant parents of modest means, Lord Levy lives in a mansion in Totteridge, north London, with a swimming pool and tennis courts. A former accountant who went on to manage the rock stars Alvin Stardust and Chris Rea, Lord Levy raised money for charity, and became one of Mr Blair's tennis partners. He also became Labour's chief high-value fundraiser, earning the title "Lord Cashpoint" from senior Labour figures impressed by the way he could get money out of millionaires.

But he ran into trouble when he helped to raise £14m in secret loans from 12 millionaire businessmen to fund Labour's successful 2005 election campaign.

Mr Brown will use his departure to signal a change of approach to the Middle East, although he remains committed to the state of Israel, which he has visited and where he has friends.