Police interview Labour donors under caution

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Indy Politics

One source close to the inquiry said the donors had been "fully co-operative" with police, but added the interviews were "not a fireside chat".

There is no suggestion that the donors have done anything wrong, but their testimony will increase pressure on Tony Blair and the Labour Party, which is being investigated under the 1925 Honours (Prevention of Abuses) Act.

Scotland Yard is following uprevelations in The Independent on Sunday that businessmen nominated for honours by Mr Blair gave secret loans to Labour.

The entrepreneur Sir Gulam Noon told the IoSthat he was among those to have spoken to detectives. "We had a talk. It's no problem at all. There is nothing to worry about," he said.

Dr Chai Patel is also understood to have spoken to detectives last week and been fully co-operative, according to sources.

Sir David Garrard, a millionaire property developer, and the stockbroker Barry Townsley, who were nominated for peerages and made loans to Labour, are said by those close to the inquiry to have been in contact with detectives. All the Labour donors are believed to have been informed that their testimony could be used in evidence in the ongoing criminal inquiry.

Opposition politicians believe the testimony will put further pressure on Mr Blair. Lord Oakeshott of Seagrove Bay, a senior Liberal Democrat peer, said last night: "The police are clearly digging and digging deep. Their inquiries must end at Downing Street."

Sir Gus O'Donnell, the head of the home civil service, is called to give evidence this week to the MPs' "cash for honours" inquiry. Lord Levy, the Prime Minister's fund-raiser, is also due to give evidence, but this could be delayed because police are also expected to interview him.

Donations of more than £5,000 must be declared, but loans at "commercial rates" do not have to be registered publicly. Detectives are believed to be finding out whether loans were made at commercial rates.