Police have recommended that two of Tony Blair’s closest allies face charges as part of the cash-for-honours scandal, in a final file submitted to the Crown Prosecution Service (CPS) yesterday.

Lord Levy, the Prime Minister’s fundraiser, and Ruth Turner, No 10’s director of government relations, will wait at least three months for a decision, The Times understands.

The police have previously discussed possible charges against Sir Christopher Evans, the biotech tycoon, Jonathan Powell, Mr Blair’s longest-serving aide, and John McTernan, the Prime Minister’s political secretary, it is understood. However, it is unclear whether they have been recommended for prosecution.

Mr Blair’s final weeks as Prime Minister — and the local elections in May — will be overshadowed by the CPS’s decision. He is the first Prime Minster to be questioned in office as part of a criminal inquiry — a 13-month process into corruption allegations that has shaken Labour to its core.

A source said: “The evidence under normal circumstances would be considered as strong. But who knows what will happen in this case. The stakes are so incredibly high.”

The 216-page file, the 12th sent by Scotland Yard’s Specialist Crime Directorate, was the main body of evidence compiled by the police. The decision on whether to bring charges will be made by Carmen Dowd, head of the Special Crime Division at the CPS. She is relying heavily upon the advice of David Perry, QC, one of Britain’s leading criminal barristers.

Any decision was at least three months away because of the sheer volume of evidence, prosecutors said. Detectives have interviewed 136 people and given the CPS reports and 6,300 documents.

Sir Ken Macdonald, the Director of Public Prosecutions, has said that he will stand back from any decision. However, Lord Goldsmith, the Attorney-General and an associate of Mr Blair, may also be consulted about any prosecution. His possible intervention has concerned some MPs, who say that he must not get involved.

Angus MacNeil, the Scottish Nationalist MP whose complaint sparked the inquiry, said: “The Attorney-General was appointed to his post by the Prime Minister, who himself is at the epicentre of the allegations. It is simply untenable for him to have any role in this case, and he must step back from that now.”

The investigation began after it emerged that the House of Lords.

Appointments Commission had blocked the award of peerages to four wealthy Labour backers who gave undisclosed loans to the party in the run-up to the 2005 general election.

Detectives surprised Downing Street by seizing computers and documents and questioning at least ten Labour donors. They later questioned Mr Blair twice, but not under caution.

Lord Levy was first arrested in July for questioning on alleged breaches of honours legislation. Ms Turner — known as Mr Blair’s “gatekeeper” — was arrested in January at her home under the same legislation.

The inquiry gathered pace in December after The Times revealed that the police were also looking into an alleged cover-up in No 10. Lord Levy and Ms Turner were rearrested in February for conspiring to pervert the course of justice.

Sir Christopher, founder of Merlin Biosciences, who lent Labour £1 million before the election, is the only other person who remains under arrest as part of the inquiry. He has confirmed that several years ago he and Lord Levy discussed whether he would ever be awarded a knighthood or peerage, but that he was never offered anything in return for loans or gifts to the party.

All three, as well as Mr Powell and Mr McTernan, deny any wrongdoing.

The CPS said it would now consider whether to bring any charges. “These decisions will be notified to the Metropolitan Police in due course and will be publicly announced after concerned parties are notified.”

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