The parliamentary inquiry into the cash-for-honours affair will resume in the autumn to consider how to make party funding more transparent and avoid similar police investigations, The Times was told last night.

Amid bitter recriminations between the police and the Crown Prosecution Service (CPS) over the decision to bring no charges against any of the suspects, it emerged that John Yates, the Assistant Commissioner of the Metropolitan Police, is to be called before MPs to explain himself.

He will be asked why he took so seriously the complaint that was originally levelled by the Scottish National Party, which many politicians have denounced as a stunt.

Tony Wright, chairman of the Public Administration Committee, said: “I don’t know the process by which they took it on. That is something that is going to be asked. Was it simply a Scottish Nationalist MP looking for a bit of mischief who walked in with an envelope of press cuttings?”

Asked if part of the inquiry would be to try to prevent a similar police investigation, he said: “I think we should try and sort these problems out. On any test, this has been profoundly damaging for the body politic and for individuals.” Mr Wright suggested that the police had been naive and inferred that they could not blame the CPS for setting a high barrier for prosecution.

Tony Blair, whose last year in office was dominated by the affair and conceivably advanced his departure date, welcomed the outcome of the inquiry, saying that those involved had been through a traumatic time.

Lord Levy, Mr Blair’s chief fundraiser, and Ruth Turner, No 10’s former director of communications, both refrained from criticising the police in responses that nevertheless showed their relief. Only Peter Mandelson and Sir Christopher Evans, the biotech tycoon and Labour donor, who was also arrested, allowed their emotions to show. Sir Christopher said there were times that he wanted to punch someone. He added that business people had become “extremely reluctant” to donate money to Labour. Mr Mandelson criticised the police and said they had used media leaks during the inquiry to “create a false impression of Mr Blair and undermine the public trust in the government.”

The Times has learnt that senior police officers have accused the CPS of abandoning the police investigation. Officers said that as a result Mr Yates had been left to defend the 16-month inquiry — despite consulting prosecution officials for more than a year. Some were concerned that he had been “hung out to dry” and was vulnerable to calls for his resignation from MPs who were angered at the way in which political institutions appeared to have been devalued by the investigation.

In a statement yesterday Mr Yates failed to endorse the decision not to prosecute. “From the beginning, the investigative team and I have liaised closely with the Crown Prosecution Service, Queen’s Counsel and the Electoral Commission, seeking their advice and views throughout,” he said. “Our job is to follow the evidence and obtain the best possible evidence. Some aspects of criminal enquiries can be undertaken on a voluntary basis, but not all.”

Mr Blair said: “Those involved have been through a terrible, even traumatic, time. Much of what has been written and said about them has been deeply unfair, and I am very pleased for all of them that it is now over.” He added: “I want to make it clear that I level no criticism at the police. They were put in an invidious position by the SNP complaint and had a very difficult task to perform.”

Lord Levy spoke of his great relief. While not commenting on the investigation, he had been “disappointed by the constant leaks to the media which have been misleading, factually inaccurate and personally damaging to me”.

Ms Turner said that the decision was “an enormous relief” after a “very stressful time for me and my family”.

Carmen Dowd, head of the CPS special crime division, said that there had been “insufficient evidence to provide a realistic prospect of conviction against any individual for any offence in relation to this matter”.

Gordon Brown said that the police were right to investigate “very serious allegations” but he hoped speculation would now end. The decision is a relief for the Prime Minister, who wants to keep open the option of an election next year and would not have wanted to call it against the background of a trial involving Labour figures.

Carmen Dowd

The head of the Special Crime Division at the CPS, 41, worked closely with Scotland Yard during the investigation. Over the past year, she has been in constant contact with Assistant Commander John Yates.

Those close to the inquiry said that she was one of the few outside Scotland Yard whom the police believed that they could trust.Her career began as a legal trainee with the CPS in 1990. She joined its central casework division in London in 1997. Her division prosecutes cases of significant public interest, including high-level corruption cases, election offences and deaths involving the police.

Miss Dowd, a barrister, has worked on many high-profile cases, but this one has proved to be the biggest challenge, her friends said.

David Perry

If people want a scapegoat over the decision not to prosecute over “cash for honours” then David Perry, QC, is an obvious target. When the CPS hired Mr Perry to advise them on whether charges should be brought, they brought in a man widely regarded to be at the top of his game. Solicitors and barristers alike praise him highly. From 2001 to 2006 he was Senior Treasury Counsel, prosecuting all the top cases in the fields of crime, extradition, fraud, judicial review – and with some commercial and civil cases thrown in. He has been in every big criminal appeal in the past five years – including 56 hearings in the House of Lords. As is traditiona, he then took silk on leaving that post in 2006. He is a deputy High Court judge.

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