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UK police find no ``smoking gun'' in peerages scandal

Police investigating the alleged cash-for-peerages (membership of the House of Lords) scandal have so far found no "compelling" evidence of serious wrongdoing, raising the likelihood that no charges will result from the high-profile Scotland Yard inquiry.

This reassurance comes from sources close to the investigation, who have knowledge of the two files of evidence the London Metropolitan Police has submitted to the Crown Prosecution Service (CPS).

"We have not seen anything compelling so far. There is no smoking gun, but that's not to say something might yet be found," a source said.

With the investigation entering its final phase, the prime minister is expected to be questioned by officers, with his chief of staff Jonathan Powell, in the next two weeks.

Although the Yard has yet to submit a final and third file of evidence into the allegations, police have so far not provided crown prosecutors with anything likely to result in charges.

This will come as a relief to donors, officials and senior politicians in both major parties who were threatened with involvement in potentially the most incendiary postwar political scandal.

Statements from donors and Lord Levy, Blair's personal fundraiser who was arrested last July, are understood to have provided no evidence that could lead to charges. Prosecutors have received material from Downing Street, but again nothing thought incriminating.

John Yates, the deputy assistant commissioner leading the probe into allegations that businessmen were illegally given peerages in return for party help with party funding, sent the first files to the CPS in the early summer.

The attorney general is being kept fully briefed on the evidence. Although the involvement of the government's most senior lawyer, a Cabinet member, in such a sensitive case will be seen as controversial, prosecuting sources see no problem.

"He will look at the case from a legal point of view. The attorney general has responsibility for the CPS and is entitled to give his viewpoint, and would expect to do so in all high-profile cases," a legal source said.

Yates is leading an eight-strong team of detectives looking at possible breaches of a law that bans the sale of awards. He is expected to complete his probe by the middle of next month.

So far police have questioned at least 48 people, 13 of them under caution, and made two arrests, of Levy and Des Smith, who works for the body that seeks sponsorship for the government's city academies.
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