UK police quiz former party leader in funding probe

LONDON, Oct 23 (Reuters) British police questioned Michael Howard, former leader of the opposition Conservatives, about a cash-for-honours scandal today, Howard said.

The police decision to interview Howard, who led the Conservatives into the last general election in May last year, made it more likely they would talk to Prime Minister Tony Blair, political commentators said.

Blair has been hurt by the row which blew up this year after it was disclosed rich businessmen had been nominated for seats in Britain's upper house of parliament after lending Blair's Labour Party large sums to bankroll its 2005 election campaign.

The row has led to demands for reform of political party funding in Britain and fuelled calls for Blair to stand down.

Blair, his popularity hit by the Iraq war and a series of government scandals, has pledged to leave office within a year.

Police have questioned several donors to the opposition Conservatives, who also have the chance to nominate people to the seats in the House of Lords, known as peerages.

''In response to a request from the police, I agreed to be interviewed by them in connection with their inquiries into nominations for peerages,'' Howard said in a statement.

''The police emphasised that they wanted to interview me as a witness and that I was not under suspicion of having committed any criminal offence,'' he said.

Howard resigned as party leader after the Conservatives suffered their third consecutive election defeat. He was succeeded by David Cameron.

Wyn Grant, politics professor at Warwick University, said he thought police would wish to interview anyone with relevant information and Howard's interview made it more likely they would want to talk to Blair. ''This has turned out to be a rather complex and long enquiry,'' he said.

Police have so far not asked to question Blair, a spokeswoman for his office said.

As part of their investigation, police have arrested the Labour Party's top fundraiser Lord Michael Levy; Des Smith, a 60-year-old former adviser on Blair's flagship schools programme; and Christopher Evans, founder of biotechnology company Merlin Biosciences.

All three were released on bail without charge and deny wrongdoing.

At least two government ministers are among the 49 people known to have been questioned during the police inquiry.

The police are investigating whether political parties broke a 1925 law banning the sale of state honours.

REUTERS PDS RAI0355