Downing Street has repeatedly dodged the question of whether the Deputy Prime Minister broke the ministerial rules over his two-night stay last July at the home of Philip Anschutz, the owner of the Millennium Dome.

The code states: “No minister or public servant should accept gifts, hospitality or services from anyone which would, or might appear to, place him or her under an obligation.”

The failure to refer the visit to Sir John Bourn, Mr Blair’s independent adjudicator, makes the Prime Minister look like he does not care about the standard of ministerial behaviour, according Sir Alistair Graham, the head of the Committee on Standards in Public Life.

This came as a string of further allegations emerged about the Deputy Prime Minister’s relationship with Mr Anschutz, including details of a cowboy outfit believed to have been given by the Dome owner to Mr Prescott, including cowboy boots, a stetson and a belt bearing his initials. A spokeswoman said that any gifts would be declared in the annual register, expected in the next month.

Meanwhile, representatives of Mr Anschutz said that they would scale down their plans for the Dome if they failed to secure a licence to run a supercasino, reducing their investment from £600 million to just over half that amount.

“There would be less exhibition space, no theatre and no hotel,” a spokesman for the company said.

Any decision to pursue a less ambitious vision for the Dome could prove an embarrassment for the Government. But a spokeswoman for Mr Prescott insisted that the deal was not contingent on a casino. The taxpayer will receive a proportion of any profits, which would be returned to the Exchequer, and current projections took no account of a casino at the Dome.

Mr Prescott’s position was further destabilised by reports that David Miliband, the Environment Secretary — seen as the torch-bearer for the younger generation of Blairites — was being lined up as a replacement if he was forced to quit. Downing Street denied that such an eventuality was being discussed.

The Times disclosed last week that Hazel Blears, the Labour Party chairman, and Jacqui Smith, the Chief Whip, were being lined up to help Mr Prescott when he takes over the running of the country in August. Yesterday it emerged that Mr Prescott could also face a police investigation. Norman Baker, the Liberal Democrat MP, has written to the police to ask whether the Deputy Prime Minister has breached the 1906 or 1926 Prevention of Corruption Acts. These prevent ministers accepting hospitality from a person who is trying to obtain an official contract. The Lib Dems are attempting to trigger an independent ministerial inquiry, which Sir Alistair said would be the proper course of action.

Don Foster, the party’s culture spokesman, wrote to Mr Blair demanding to know if Mr Prescott had broken the ministerial code. Mr Blair is likely to have to reply this week.

Sir Alistair said: “I think the Prime Minister and the Government would be better positioned in dealing with these issues if they used the procedure that he himself introduced only fairly recently.

“Otherwise you lay yourselves open to the criticism either that you are rather lax or don’t care sufficiently about standards issues, or political considerations in terms of whether there could be a deputy leader election. All those sorts of political-type issues are uppermost in your mind, rather than what is proper from a public point of view.”

Patricia Hewitt, the Health Secretary, dismissed the reports that Mr Miliband could be set to replace Mr Prescott as speculation and froth. “There is no vacancy at the moment for deputy leader or Deputy Prime Minister and John Prescott, like the rest of us in government, is just getting on with what we were elected to do,” she told the BBC.

Kate Hoey, a Labour backbencher, questioned whether Mr Prescott could stand in for Tony Blair over the summer. “When you look at every single paper full of it, with editorials, cartoons, all sorts of things, is it really realistic for him to stay on?” she said.

SHOULD HE STAY OR SHOULD HE GO? THE OPTIONS

NO CHANGE

Prescott stays as Deputy Prime Minister and Deputy Leader

Advantages Blair does not have to endure a contest for the deputy leadership

Disadvantages Labour could be in for an embarrassing August with Mr Prescott in charge while Mr Blair is away. And how many more revelations will come out?

RELINQUISHES DEPUTY PRIME MINISTER ROLE

There is no rule in Labour’s constitution preventing the deputy leader not being in the Cabinet, and this would avoid a ballot of the Labour Party. This would clear the way for a Blair like David Miliband to take the title

Advantages No race for the deputy leadership

Disadvantages This assumes that Mr Prescott is not angered by being downgraded and resigns from both jobs

RESIGNS BOTH POSITIONS

Nuclear option that Mr Blair and Mr Prescott want to prevent. Under NEC rules the Cabinet, in consultation with the NEC, can appoint one of its members to serve as deputy (or keep the post vacant) until the the next party conference, when an election must be held. At some point Prescott may decide it is not worth continuing

Advantages Allows a “fresh start” for the party

Disadvantages Would a bruised Mr Prescott wreak revenge on his old master?

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