No 10 under pressure as cash-for-honours inquiry reopened

Tony Blair and his closest aides face fresh questioning in the cash-for-honours affair after prosecutors instructed detectives to return to the case, even though they formally ended their investigation last month. The development will increase pressure on the Prime Minister, Downing Street staff and Lord Levy, Mr Blair's chief fundraiser.

In a sign that the Crown Prosecution Service is taking the case extremely seriously, police have been told to find key pieces of evidence to strengthen the case. The move will unnerve Downing Street staff, who have been privately expressing confidence that nobody will be charged in the affair.

Mr Blair, who has spoken to the police already, may face a further interview with detectives, but this time under caution, when he leaves office next month. Lord Levy and Ruth Turner, a key Downing Street aide, are among those who may also be questioned again.

A spokeswoman for the CPS, which has received hundreds of pages of evidence, confirmed: "We have asked the police to conduct some further inquiries."

Angus MacNeil, the Scottish Nationalist MP whose complaint to the police led to the launch of the inquiry, said the news increased the prospect of another police interview for Tony Blair.

"This is clearly going to reverberate around the dying days of the Blair Government, and once Blair has retired it might be more interesting still," he said.

Several key lenders at the centre of the cash for honours affair have been asked by Labour to roll over their loans to save the party from being forced into receivership. Sir David Garrard, who was due to be repaid £2.3m last month, and Dr Chai Patel who was owed £1.5m in August, have decided not to call in the loans. Both men are understood to have given the party more time to repay. In 2008 the party will have to make millions of pounds more in loan repayments, including £1m to Barry Townsley, who was proposed for a peerage by Tony Blair.

Opposition politicians said the party would have been told to stop trading if it were a company. Lord Oakeshott of Seagrove Bay, a Liberal Democrat treasury spokesman, said: "If this was a commercial company the auditors would be warning the directors they should call in the receivers."

Senior Labour figures fear that the party's auditors, who are now examining the accounts, will not be able to sign the party off as a going concern because Labour does not have enough money to pay back its debts. The party was due to pay back almost £10m in loans this year.

Members of the party's governing body, the National Executive Committee, will become personally liable for the party's debt if the auditors refuse to say that the party is a going concern.

One member of the NEC said: "The only way our accounts will be signed off is if the lenders give us more time to pay or turn the loans into donations."