Police halt Commons inquiry into Levy

A Commons committee took the unprecedented step last night of postponing taking evidence from Labour's chief fundraiser Lord Levy and two millionaire backers of the party to allow the Metropolitan Police to carry out criminal investigations.

Chai Patel, the head of the Priory rehab clinics and Sir David Garrard, former director of Minerva property development company, who gave loans to Labour before the election were both due to give evidence today to the Commons select committee on public administration.

But the committee chairman, Labour MP Tony Wright said that after an appeal to the committee by deputy assistant commissioner John Yates of the Metropolitan Police special crime directorate, the MPs had agreed to postpone the hearing.

Mr Yates asked the committee not to risk undermining the police investigation into allegations that the Prime Minister sold peerages for cash.

Lord Levy could be a crucial witness, if any criminal case is made against Mr Blair or senior Labour officials. There is no suggestion of wrongdoing by Dr Patel or Sir David but the Met team were worried that evidence given could conflict with any criminal case.

* The Government last night signalled a U-turn in which Tony Blair will drop his opposition to a largely elected House of Lords. MPs are likely to be given a free vote on whether 70 per cent of peers should be elected by the public.