PARLIAMENT clashed with Scotland Yard yesterday over the right to question witnesses such as Lord Levy while investigating “loans for peerages” allegations.

In a closed meeting of the Public Administration Committee, MPs told police and Crown Prosecution Service representatives that they want to interview the Prime Minister’s personal fundraiser next week.

Police argued that MPs should wait until he has been formally interviewed by detectives. MPs will decide whether to go ahead at another Committee meeting this morning.

The clash has enraged Whitehall officials, who said that MPs could “cripple” the eight-week police investigation.

“The question has to be asked whether this is an orchestrated move by MPs to protect their own, and avoid scrutiny. The police need time to put together the evidence. A few weeks is not enough,” one source said. “The police inquiry was launched because there is a case to answer. If they cannot ask questions to key figures such as Levy, it will be scuppered,” he said.

The showdown between the police and the select committee is unprecedented, with both sides refusing to back down last night. The 11-strong committee, which has a one-vote Labour majority, was divided over whether to capitulate to the police demands or to press on with their own televised questioning of Lord Levy.

With the police inquiry set to go on until the autumn there was a hardening of opinion among some members of the committee that they could not wait that long. One MP said: “Frankly, we are very sceptical whether the committee’s inquiry will prejudice the work of Scotland Yard. Many MPs want the committee to assert its right as the pre-eminent court in the land and to get on with it. Who knows whether the police inquiry will fizzle out?” One option canvassed at last night’s meeting was to hold the hearing with Lord Levy, which is scheduled for next Tuesday, in camera with the press and television banned.

MPs also want to question donors such as Sir David Garrard, a retired property developer, who secretly lent the party £2.3 million and made a similar donation to a city academy project in southeast London. The committee agreed in March to suspend its planned evidence sessions after warnings from police that it could prejudice any criminal proceedings.

In a letter to the committee, John Yates, the Deputy Assistant Commissioner of the Metropolitan Police, said that prosecution was “the only credible deterrent for any briber”.

Times Recommends

• Fern Britton: 'I still can't see that I was wrong'
• Extreme cooking
• Easy French: Tarte Tatin