The Met needs something to show for its efforts

Now that Michael Howard has received the knock on the door over cash for honours, what matters is wh

The power of patronage has always dazzled politicians who wield it and those who stand to gain from it. Now they are blinking on the other side of their faces, were such a thing physiologically possible.

On Iraq, Tony Blair is bemused that military moaners fail to understand the direction from which their next defence review will come. If we "cut and run" now, he believes, none of his successors will be able to persuade parliament to commit UK forces to fighting operations. Faint-hearted generals should realise that a European-style fate awaits them - the command of a dwindling, poorly resourced force fit only for peacekeeping and back-up, certainly not standing shoulder to shoulder with US troops. Downing Street hopes the silence of the chief of the defence staff shows that at least Sir Jock Stirrup understands the implications.

The consequences of the war have produced political traumas for years to come. A more immediate cause of political heart-fluttering is the ongoing police investigation into loans for honours. The acting deputy commissioner of the Metropolitan Police, John Yates, has been pursuing his inquiries since March. So far, more than 50 witnesses have been questioned, roughly a third of them under caution and three under arrest (all linked to Labour: Lord Levy, Des Smith and Sir Christopher Evans).

This past week's knock on the door of the Rt Hon Michael Howard, QC MP, demonstrates that Yates intends to take his probe all the way to the top. Yates learned the hard way: he must have wished he had interviewed the Queen when she collapsed his prosecution of the royal butler Paul Burrell.

The word is that the Prime Minister himself will be questioned before the end of the year. The only matter to be determined is the terms of such an interview. Howard was afforded the full courtesy of the non-suspect. He was neither cautioned nor arrested, and gave evidence as a witness. "His" peer, Robert Edmiston of Midlands Industrial Council fame, is even now expected to get ennoblement in the next honours list.

By contrast, the Scotland Yard bush telegraph has been thumping out for months that the PM will be interviewed under caution against self-incrimination - a sign that he could have a charge to answer. Ruth Turner, Blair's director of government relations, was cautioned when she was questioned. Although such a move does not assume guilt, No 10 is extremely anxious that Blair should escape a caution. For some time, officials have been angered by the briefings coming from the police. On the face of it, Labour has more to answer in this particular inquiry, but the kid-glove treatment afforded Howard would prejudice any decision to question Blair under tougher conditions.

Blair versus Blair

Downing Street laughs off suggestions that the inquiry is an insurance policy for that other Blair, the Met's commissioner, against criticism in the investigation of the killing of Jean Charles de Menezes. Sir Ian Blair, they say, was their appointment, a great communicator in the mould of Tony himself - why should No 10 turn against the top cop? But Yates will need something to show for a trawl that began in March and is now expected to last into the New Year. His Met bosses bolstered him this week with temporary promotion to acting deputy commissioner (from deputy assistant commissioner). There is a vacancy, and the post is expected to become permanent if all goes well.

However disgusted Yates may be by the smell coming from party politics, he would need hard evidence to bring a charge under the Honours (Prevention of Abuses) Act 1925. Either a briber or a bribee would have to turn Queen's evidence and incriminate himself. There is no sign anyone has done so. Some of those directly implicated in allegations of peerages for loans have even (so far) refused to talk to the police.

The Times story in May suggesting that Blair will in any case include the blocked peers in his resignation honours list is an overlooked aspect of this affair. According to precedent, this final list will not be vetted closely. If there are any guilty consciences they are unlikely to be pricked by the prospect of getting their gong.

As the NS recently revealed, Yates is much more likely to settle for breaches of new Labour's own Political Parties, Elections and Referendums Act 2000. Loans at anything other than a full commercial rate should have been disclosed, and they weren't.

Accounting oversight would stop a long way short of the Prime Minister's desk. Yates would simply pass his file to the Crown Prosecution Service and any decision on court action would rest with Ken Macdonald, director of public prosecutions. The first hint we'll get if things are going awry for Blair will be if Yates dares to interview him under caution.

Adam Boulton is political editor of Sky News

Martin Bright is away