Cash for honours row over legal advice to civil servants

Government lawyers have provided legal advice to officials during the cash for honours affair, prompting accusations of a serious conflict of interest.

The Independent on Sunday has learned that lawyers from the Treasury solicitors department have scrutinised the law on the abuse of honours and even taken outside advice from leading barristers.

The involvement of government lawyers, who are accountable to the Attorney General, during the police inquiry is controversial because the Attorney General will play a key role in deciding whether the case should go to court. The revelation will also raise fresh questions about why the lawyers were called in on a Labour Party matter.

Senior Whitehall sources said that Edmund Lawson QC, a senior criminal barrister specialising in fraud, was among those asked for his professional advice by the government lawyers after the police launched their investigation into cash for honours. Mr Lawson refused to comment. But one well-placed Whitehall source said: "The Treasury solicitors were looking at this early on and were unsure of a point of law. They sought Edmund Lawson's advice."

The revelation, previously denied by Whitehall, will prove embarrassing to the Government. The Labour Party has now brought in outside legal advisers to officials, including some of Tony Blair's closest aides. Lord Oakeshott of Seagrove Bay, a Liberal Democrat peer, is to table parliamentary questions about the involvement of government lawyers in the affair. "Why was taxpayers' money used to give legal advice which could benefit the Labour Party?" he asked.

The news comes as the police reached the final stages of the investigation and are expected to pass a file of evidence to the Crown Prosecution Service by the end of the month.

In a measure of how seriously the CPS is taking the inquiry it has now hired a second barrister to act on the case. David Perry QC, the senior counsel in the case will now be joined by Robin McCoubrey a criminal barrister who will decide whether there is enough evidence to prosecute.

This week Sir Alistair Graham, the standards watchdog, is expected to call for greater transparency in political parties' declarations of loans in a report on the electoral commission.