PM's aide interviewed in peerage inquiry

John McTernan, the Prime Minister's political secretary, has been interviewed under caution by the Metropolitan Police over a Downing Street e-mail trail in the "cash for peerages" inquiry.

The interview signalled that police are embarking on an intensive second round of interviews with the Prime Minister's closest aides as the unit under Assistant Commissioner John Yates draws the net tighter on No 10. Mr Blair, who was interviewed without caution before Christmas, could also face a second police interview - this time under caution.

Police are to cross-examine key Downing Street players after taking statements under caution from Lord Levy, the party's chief fund-raiser, and Christopher Evans, the tycoon, who loaned Labour £1m. He is reported to have been questioned about a diary note suggesting he was offered a "K or a big P", meaning a knighthood or a peerage.