BBC gagged over UK political funding scandal

LONDON, Mar 3 (Reuters) The British Broadcasting Corporation has been barred from running a story abouta political funding scandal that has cast a shadow over Prime Minister Tony Blair's final months, police said today.

The government's top lawyer, Attorney General Lord Peter Goldsmith, obtained a court injunction stopping the broadcast late yesterday following a request by police probing whether political parties awarded state honours in return for loans.

Police sought the injunction ''because of their concern that disclosure of certain information at this stage would impede their inquiries,'' a joint statement from the Metropolitan police and Goldsmith said.

The move sparked speculation among politicians that officers were planning to bring charges against one or more individuals.

Two Blair aides were recently arrested on suspicion of perverting the course of justice or conspiring to do so as the probe appeared to widen into a potential cover-up inquiry.

Blair, who is set to step down this year after a decade in office, has been questioned twice as a witness by detectives investigating whether businessmen were offered honours, that come with seats in parliament's House of Lords, for cash.

The injunction was granted shortly before the BBC was due to broadcast the story on its ten o'clock news.

''The Attorney General acted in this regard completely independent of government and (in) his independent public interest capacity,'' said the statement.

The BBC said its reporting of the story was a matter of public interest.

PROSECUTION TO FOLLOW? The leader of the opposition Liberal Democrats Menzies Campbell suggested the blocking of the report implied detectives were planning on charging someone.

''I think what one might be able to infer from the fact that he (the attorney general) felt it necessary to seek this injunction is that he at least contemplates the possibility that a prosecution of some kind will follow,'' he told BBC's Newsnight programme late yesterday.

Police began in March last year to probe claims that Blair's Labour Party and other parties had nominated people for seats in the Lords in return for party funding.

Lord Levy, Blair's top fundraiser and West Asia envoy, was arrested in January on suspicion of conspiracy to pervert the course of justice, signalling the inquiry had moved beyond the funding scandal. He was first arrested last year.

Ruth Turner, director of government relations in Blair's office, was also arrested in January on suspicion of perverting the course of justice and released without charge.

All those involved deny any wrongdoing.

REUTERS SP PM1756