Lord Goldsmith, the Attorney-General, insisted yesterday that he would not give up his power to have the final say on whether prosecutions are brought in the cash-for-honours inquiry.

Critics have urged Lord Goldsmith, QC, to stand aside, alleging a conflict of interest because he is a member of the Cabinet and former Labour donor who was elevated to the peerage by Tony Blair.

His defence of his role came only two days after police sent a final 216-page file to the Crown Prosecution Service outlining the main evidence against at least two of the Prime Minister's closest allies.

But Lord Goldsmith, who said that he had yet to see the file, insisted that he would judge the case for a prosecution “objectively, on the evidence, independently from Government”. He told Sky News that he was unable to stand aside from the case because the law required his consent before certain charges were brought and because he was the only figure accountable to Parliament for the actions of the CPS.

He repeated his pledge to appoint an independent barrister to advise him if consulted on possible prosecutions arising from the 13-month cash-for-honours inquiry, and to publish counsel’s advice if no charges were brought.

But he said he could not commit in advance to rubber-stamping the advice of the barrister, who would be selected in consultation with opposition parties to dispel any suspicion of partisanship.

“It is normal for me to be consulted in sensitive and complex cases . . . I can assure you that, if I am consulted, any decision will be taken objectively, on the evidence, independently of Government, because my first duty is to the law, not to party politics.

“My office will appoint independent counsel. I will consult the opposition parties on the identity of that person and make public the advice that is given if there is not a prosecution,” he said.

The Times disclosed on Saturday that police had recommended that Lord Levy, the Prime Minister’s chief fundraiser, and Ruth Turner, his head of government relations, should face charges. Another three people — Jonathan Powell, Mr Blair’s chief of staff, John McTernan, his director of political relations, and the bio-tech tycoon Sir Christopher Evans — were also discussed with prosecutors.

Yesterday, newspapers reported that all five members of Mr Blair’s inner circle were being considered for possible charges after the file was handed over by police.

Reports resurfaced yesterday linking Mr Powell to wealthy Labour donors from the moment that he and Mr Blair entered Downing Street after the general election in 1997.

A memo written by Amanda Delew, an aide to Lord Levy in Labour’s high-value donor programme before and after the 1997 election, said that the support of both Mr Blair and Mr Powell was vital to the party’s efforts to raise more money.

“Jonathan offers an opportunity for them to meet someone at the focus of all activity, who will answer their questions while providing a reason for them to visit Number 10. He offers authority and integrity and has proved his ability at charming and impressing both potential and existing donors,” the memo said.

The document, reproduced by the Sunday Telegraph, was dismissed by a Downing Street source who said that had been written without authority “by a relatively junior person” and “didn’t even reach senior management”.

Lord Goldsmith was critical of apparent leaks from the inquiry and prosecution team, which he said were “not helpful”. He suggested that an investigation should begin after the case closed to address concerns about the way it had been handled.

Lord Goldsmith emphasised that it was not certain that he would be consulted by the Crown Prosecution Service. But he said that the law required him to have the final say if Carmen Dowd, head of the CPS’s Special Crime Division, decided to go ahead with certain charges relating to the alleged sale of honours or perversion of the course of justice.

“The Director of Public Prosecutions [Sir Ken Macdonald] has made it clear he has stood aside and that means there is no other senior person who can express a view in relation to this,” Lord Goldsmith said.

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