You can learn a lot about Lord Levy, Tony Blair’s chief fundraiser, from the way he greets people. First comes the firm, over-friendly, double-clasp handshake, followed by a slightly inappropriate hug. Then there are the little intimacies, the perfect recall of family details and the frequent namedropping of his tennis partner, “Tony”.

This well honed manner has served him well: first as Michael Levy, the music entrepreneur who brought Alvin Stardust to the world; then, ennobled, as Blair’s personal envoy in the Middle East and as Labour’s big-donor fundraiser. But now he is under investigation — yesterday it was the turn of the Commons Constitutional Affairs Committee — and his position on the Labour Fundraising Committee is under threat.

Lord Levy, 61, the diminutive entrepreneur who brokered £14 million in loans before last year’s general election, is now the pivotal figure in Scotland Yard’s cash-for-peerages investigation. The allegation — strongly denied — is that the Labour Party solicited the money by promising honours.

Privately, he is determined not to take the blame for any mistakes that Labour may have made and insists that Blair knew about everything he did. Whether the police and Parliament believe him is another matter.

Michael Abraham Levy was born in 1944 in Stoke Newington, London, the only child of a devout Jewish couple who lived in a single room until he was 9. At school he was known for sprinting and table tennis, rising to become head boy. He left at 16 to become an accountant, before gravitating towards the record industry. He married Gilda in 1967; they have one son and one daughter.

He launched his own label, Magnet, in 1973, presciently backing Alvin Stardust and Chris Rea. In 1988 Levy sold the business for £10 million and used that money to turn around the charity Jewish Care, with which he is still involved today.

Blair first met Michael Levy at a dinner given by an Israeli embassy official in 1994, and the two immediately became friends, playing tennis every Sunday. The relationship grew and in his spare time Levy began setting up “blind trusts” to fund Labour’s 1997 election race. After Blair became Prime Minister, Lord Levy’s power, along with Blair’s dependence on him for fundraising at election time, grew.

Lord Levy has made it quite clear that he will not continue after Gordon Brown assumes power. But the question now is: will he be forced out before then?