THE Commons investigation into links between peerages and political donations was in chaos last night after the two central witnesses withdrew from giving evidence at short notice.

Sir David Garrard, 67, the property developer who lent £2.3 million, and Chai Patel, 51, the founder of the Priory clinic, who lent £1.5 million, both cited personal reasons for their unexpected withdrawal from today’s opening hearing.

Their absence dismayed some members of the Commons Public Administration Committee, which is looking into any links between the awarding of honours and donations to political parties and the Prime Minister’s treasured city academies project.

Sir David and Dr Patel have both had their peerages blocked by the House of Lords Appointments Commission after being put forward by Tony Blair. Sir David also gave £2.5 million to a city academy.

The Conservatives, who have refused to follow Labour by disclosing the names of the lenders who contributed £18 million to them, were told yesterday by Bob Edmiston, who made a £2 million loan, that he would not ask for his money back. The party will now have to register the gift with the Electoral Commission.

“I wanted to make this public myself, in the interests of transparency, given the media reports that the nomination of my name for the peerage has not been accepted,” Mr Edmiston, a car importer, said.

The Commons inquiry was set up after the furore over the revelation that four of Labour’s nominees for a peerage who have been blocked by the Lords Appointments Commission had made secret loans to the party.

Downing Street declined to tell the commission about the loans even though the commission requires information about all relevant financial links between nominees and the party that proposes them.

Scotland Yard is conducting a separate inquiry into the allegations of peerages for sale and has been in contact with the Cabinet Office. Neither Dr Patel nor Sir David has been approached by the police.

Dr Patel insisted that he had only postponed his appearance before the all-party committee, but there was no such assurance from Sir David, the retired chairman of the Minerva property company, whose wife, Maureen, has been taken ill. “I do not know if he will give evidence or not,” his spokeswoman said. Sir David’s £2.5 million support for the city academy in Bexley, southeast London, is flagged up on the No 10 website. Mr Blair, opening the academy, paid tribute to: “David and Maureen Garrard, whose sponsorship, vision and dedication have driven this project forward so successfully.”

Sir David also gave a separate £200,000 donation to the Labour Party. John Prescott, the Deputy Prime Minister, was urged by opposition MPs to step aside from all planning applications involving Minerva. Andrew Rosenfeld, who succeeded Sir David as chairman, also made a £1 million loan to the party.

Minerva’s £600 million plans for one of Britain’s biggest shopping malls in Croydon, South London, depend on a compulsory purchase order, which would have to be sanctioned by Mr Prescott’s department. Mr Prescott has denied that he had any knowledge of the financial links with Sir David when his department had to adjudicate on an application to build the 721ft (220m) Minerva Tower in the City of London.

Dr Patel, in a letter to the committee, blamed his withdrawal on the amount of time he had been forced to spend on dealing with the public fallout of his blocked peerage.

“I have a full-time role with the Priory Group, one that I take extremely seriously,” he wrote. “I did initially think that I would be able to attend on Tuesday morning but the requirements of my role, especially given the pressure on my time in recent weeks, now mean I am unable to be present.

“I remain totally committed to answering a call to appear before the committee if that is what the committee wishes. A request to appear before Parliament is something I take extremely seriously.

“I am not refusing to attend, purely postponing my attendance due to the fluctuating and fluid diary pressures resting upon me as a chief executive of a company employing over 5,000 people.”

Lord Levy, who is Tony Blair’s personal fundraiser, will give evidence to the inquiry in May after the Easter break. Jonathan Marland, the Tory treasurer who is also nominated for a peerage, will also be asked to appear.

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