MPs pledge inquiry into cash-for-peerages affair

Labour's hopes of drawing a line under the cash-for-peerages allegations were dashed yesterday as a powerful committee of MPs indicated that it would open a full-scale inquiry into the affair after the police investigation is complete.

Rumours circulated in the Scottish Parliament that Tony Blair could be the next to be interviewed under caution, but the MPs said they would not let their inquiry into sleaze drop, even if the Director of Public Prosecutions decides not to proceed with charges.

The committee chaired by Tony Wright, a senior Labour backbencher, plans to call Metropolitan Police Assistant Commissioner John Yates, who is heading the investigation, as a "star witness" and is prepared to question in public the key figures in the controversy, including high-profile Labour donors and senior Downing Street aides.

Members of the Commons Public Administration Committee plan to review the law on corruption and public life when the police inquiry and any court action are complete, in a move that threatens to reopen the long-running controversy. They are willing to call evidence from Ruth Turner, the head of government relations, who was arrested by police on suspicion of perverting the course of justice.

They will also summon Jonathan Powell, the Prime minister's chief of staff, and John McTernan, director of political operations. Sources indicated the committee is also prepared to call the four Labour donors at the heart of the inquiry, Gulam Noon, Chai Patel, Barry Townsley, and Sir David Gerrard.

The all-party committee has put its inquiry into honours on hold while the police carry out their investigation. But itsr annual report yesterday made it plain that the MPs would not let the matter drop. "We intend to review the law as it reflects public life and corruption, taking any lessons from the case once the police investigation and any subsequent proceedings are complete, and we have invited the police to contribute to that review. We still firmly intend to do so."

One source said: "We will go wherever this takes us. We may call Powell, Turner and McTernan and bring it all out and find out what has been going on. We have got to get to the bottom of it."

Downing Street denied claims that the police had uncovered an alternative e-mail system. "There is no parallel e-mail system in Downing Street," said the Prime Minister's official spokesman. But that did not stop suspicions that there could be a parallel system operating from outside Downing Street.