Tories to reveal identity of their millionaire lenders

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The Tories are expected to name their donors today after an announcement by Scotland Yard that it was widening the scope of its criminal investigation into "cash for honours" to include the Conservative Party.

It is understood the Scotland Yard inquiry will move to Conservative loans from abroad that could breach anti-sleaze laws which ban donations, if the electoral watchdog, the Electoral Commission, refuses to accept they were given on commercial terms.

Tony Blair is flying back to Britain today from his tour of Australia and the Far East to face the prospect of police questioning. But the move by Scotland Yard to broaden it into a cross-party inquiry has thrown the focus on to David Cameron.

A Scotland Yard official said: "The Metropolitan Police has continued to receive a number of allegations in relation to the award of honours in contravention of the Honours (Prevention of Abuse) Act 1925," said a Met spokesman. "These allegations are being investigated by the specialist crime directorate and this is now a cross-party investigation."

Mr Cameron has been desperately trying to persuade the anonymous millionaires who lent the party large sums for the last election campaign led by Michael Howard to allow their names to be released.

The Tories have been warned by the Electoral Commission that it will use its powers to force them to release the names, if they refuse to. The commission chairman, Sam Younger, has made it clear the Tories could be in breach of the electoral rules by failing to declare loans which were actually donations.

Mr Cameron has insisted the loans were made on a commercial basis, enabling the party to evade the rules of disclosure. But Mr Younger has warned that the commission will find whether the loans were given over a fixed repayment period, at a commercial rate, and with security. Bob Edmiston, a millionaire car importer, raised fresh doubts this week when he said he will not ask the Tories to repay the £2m he lent the party. The Labour MP Rosemary McKenna had asked police to investigate whether the Tories had contravened the Abuse of Honours Act. She also asked them to look into whether the Tories had in effect received illegal foreign donations through "soft" loans from overseas supporters.

The police inquiry was originally launched after a complaint by Scottish and Welsh nationalist MPs that Labour had broken the 1925 Abuse of Honours Act which outlaws the sale of honours. The House of Lords Appointments Commission had blocked the appointment of four of Tony Blair's nominations for peerages, wealthy businessmen who had made loans to Labour.

The officer leading the inquiry, Deputy Assistant Commissioner John Yates, is prepared to consider allegations of corruption after Tory claims of links between planning applications and major government contracts and three of Labour's lenders.