DETECTIVES are preparing to interview the Prime Minister in the widening investigation into allegations that Downing Street sold peerages.

Last night No 10 refused to comment on the suggestion from Scotland Yard that detectives would speak to “all the actors” involved in raising the £14 million of secret loans for the Labour Party.

Only Tony Blair, Lord Levy, his personal fundraiser, and Matt Carter, then the party’s general secretary, were aware of the deals that helped to bankroll last year’s election campaign.

Lord Levy said last night that he would be willing to speak to detectives. He said that he had nothing to hide and his spokesman added: “He is proud of his role in raising money for the Labour Party.”

Downing Street, however, declined to say whether Mr Blair would co-operate. The Prime Minister’s official spokesman said that it would not be making any comment.

Four Labour lenders have had their peerage nominations blocked by the House of Lords Appointments Commission. Downing Street failed to reveal to the commission the scale of their financial support.

Last night one of the donors revealed he had written to No 10 saying he no longer wanted to be considered for a peerage. Dr Chai Patel, founder of the Priory Clinics, who lent Labour £1.5m, said that he felt “honoured” to be nominated for a peerage.

But he said: “My good intentions and contributions to public service over the years seem to have been discounted, and it has left me feeling that my reputation has been damaged.”

He said that he had written to the commission to seek “clarity” over why his name had been blocked and to put a stop to the unattributed leaking of details of his case to the media.

But he had seen his reputation, and that of his family, “dragged through the mud”, and no longer had any expectation of receiving the explanation he wanted.

“I at no time had any expectation of any sort of reward [nor was any such representation made to me] when I agreed to support the Labour Party financially,” he wrote.

Meanwhile, the Electoral Commission last night threatened to use legal force to make the Conservatives disclose the identity of the backers behind £20 million in loans.

The commission said that it still had doubts over whether all the loans were made on commercial terms — a requirement if the loans were not to be declared publicly.

But a Tory spokesman said: “We have reviewed our files with the benefit of legal advice and we are satisfied that loans made to the Conservative Party are made on commercial terms falling within the scope of the relevant legislation. We look forward to hearing from the Electoral Commission and will provide them with relevant supporting evidence.”

In a statement, the commission said: “Questions remain about whether these previous loans were made on commercial terms. The commission will, therefore, be requesting an explanation of their rationale for concluding that loans were made on commercial terms.”

The Electoral Commission has powers, under the Political Parties, Elections and Referendums Act 2000, to require political parties to provide relevant documents, records and other information about their income and expenditure. “If necessary, we would be prepared to exercise these powers to obtain the information we require to judge whether a political party has fully complied with the law,” the statement added.

John Yates, the deputy assistant commissioner who is heading the investigation, has told a Commons committee that it could be widened to cover reports that some lenders had been given favourable plann- ing permission or government contracts.

MAN IN HOT SEAT

John Yates, the Deputy Commisioner of the Metropolitan Police who is investigating the loans affair, is Director of Intelligence and Business Development at the Yard, but colleagues say that equates to clearing up thankless and tricky problems.

Aged 47, he oversaw the failed 2002 prosecution of Paul Burrell, the Princess of Wales’s former butler, for alleged theft.

He was put in charge of the British police’s response to the tsunami in 2004, which required liaison between British families and foreign governments.

He has held a number of high-profile positions, including Staff Officer to the Commissioner and led one of the largest corruption inquiries

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