British Ministers questioned by police

LONDON, July 14: At least two British government ministers have been questioned by police in connection with a loans-for-peerages scandal, their spokesmen said today.

Neither Science Minister Lord Sainsbury nor Trade Minister Ian McCartney were cautioned before questioning, they added.

''Lord Sainsbury was one of 48 people questioned in connection with this,'' the science minister's spokesman said.

''Thirteen people have been cautioned and he is not one of them.'' A spokesman for McCartney, a former chairman of Prime Minister Tony Blair's Labour Party, said the minister had spoken voluntarily to police in the past few weeks.

Supermarket millionaire Sainsbury is one of Labour's biggest donors and lent the party 2 million pounds before last year's election, according to media reports.

Police are investigating allegations that Labour illegally promised peerages, which come with life-long seats in the House of Lords, in return for secret loans.

The long-simmering party finance scandal boiled over onto the front pages this week when police arrested Lord Michael Levy, Labour's top fund-raiser.

Levy, 62, who is also the Prime Minister's sometime tennis partner and personal envoy to the Middle East, was bailed without charge.

Levy's spokesman called his arrest an ''entirely theatrical'' stunt that whipped up a ''media circus''.

Newspapers said police could apply to question Blair himself. The scandal has hurt Blair and added to calls that he stand down amid a series of sex, sleaze and incompetence allegations that have surrounded several members of his cabinet over the past few months.

''The Prime Minister must appreciate by now that he made a profound error by permitting Labour to raise additional funds via loans and then not insisting that the supporters involved declare those loans to the Electoral Commission...,'' the Times newspaper commented today.

Police Deputy Assistant Commissioner John Yates, the officer in charge of the investigation, said yesterday he had submitted two files to the Crown Prosecution Service and expected to hand over a full report by the autumn.

Tony Wright, chairman of parliament's Public Administration Committee, said the majority of people interviewed so far had been from the opposition Conservative Party. Three Labour donors have declined to be questioned.

Labour came under pressure after it said it had received 14 million pounds in loans from 12 businessmen, some of whom were nominated for seats in the House of Lords. A law introduced in 1925 makes it illegal to sell peerages.

Blair, who led Labour to an unprecedented third electoral victory last year, has pledged not to stand for a fourth term, but has not said when he will step down.

In recent months several ministers have been hit by scandal, including Deputy Prime Minister John Prescott, who admitted to an extra-marital affair, and ex-Home Secretary Charles Clarke, sacked after it emerged hundreds of foreign criminals had been freed instead of being deported.

REUTERS