Police quiz UK's Blair in cash-for-honours probe

LONDON, Dec 14 (Reuters) Britain's Tony Blair was quizzed as a witness today by police probing claims that political parties awarded state honours in return for loans, and analysts said it was a fresh embarrassment for a damaged prime minister.

Blair was not cautioned by police about his rights before the interview, suggesting officers do not believe he has charges to answer.

''The prime minister talked to the police today,'' Blair's spokesman told reporters. ''This was not under caution, nor was he accompanied by a lawyer.'' Police launched an inquiry in March into allegations by an opposition party that Blair's Labour Party and other political parties had nominated people for seats in parliament's upper house, the House of Lords, in exchange for party funding.

Blair's police encounter further tarnishes the reputation of a leader whose popularity ratings have plummeted over his decision to back the US-led Iraq war.

But the fact he was only questioned as a witness softens the blow, suggesting he will not be charged, analysts said.

''The whole saga and the revelations about the Labour Party's use of loans to circumvent some of the rules on party financing has certainly damaged the Prime Minister,'' said Philip Stephens, Blair biographer and commentator.

''It is significant that he wasn't questioned under caution. Had he been questioned under caution that would have carried a deep impression that he was suspected of wrongdoing,'' he added.

The long-awaited announcement that Blair had been grilled by police came just before Blair flew to Brussels to meet European Union leaders and coincided with a police report into the death of Princess Diana.

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