A LABOUR MP and practising QC specialising in commercial fraud has written to detectives urging them to investigate whether Tony Blair has broken accounting law over secret loans raised by the party.

Bob Marshall-Andrews, MP for Medway, has written to John Yates, the Metropolitan police assistant commissioner who heads the cash for peerages investigation, advising him to investigate the charge of false accounting. He is known as a critic of Blair but the fact that a Labour MP has written to police underlines the depth of concern at the damage caused by the cash-for-honours scandal.

Marshall-Andrews believes that Labour should legally have declared the £14m raised in loans in its official accounts. An offence of false accounting carries a maximum prison sentence of seven years.

This weekend Marshall-Andrews said: “I think the implications are very serious. I wrote to the party and got an unsatisfactory response so I wrote to Yates and said he should take on board the issue of false accounting. He wrote back and said ‘we will look at it’.”

It is understood that detectives have now looked into the allegations and have sent a confidential report to the Crown Prosecution Service.

Marshall-Andrews, who has been critical of Blair’s proposals for the Lords and for legal reforms, said: “I think this is a resigning issue for Blair.”

It also emerged this weekend that Labour has repaid more than £250,000 to a businessman arrested by Yates’ team. Sir Christopher Evans, a biotech millionaire, received the money on Thursday as the first instalment of Labour’s repayment of a £1m loan. The remainder of the loan, which was to help fund the 2005 general election, will be returned with interest early in January.

The repayment comes amid increasing concern in Labour circles at what Evans may have told detectives. Earlier this month it emerged that police had seized Evans’s diary recording his discussions with senior Labour figures, including Lord Levy, about honours.

These discussions are understood to have covered Evans’s future “aspirations” and the possibility of becoming a peer or even science minister. However, no offer of a peerage was formally made.

Evans asked for his money to be repaid in the summer but Labour struggled to find the necessary cash. However, the party raised the money from the unions.

Evans is thought to be the first of 12 lenders to have received money back. Labour has a debt of almost £23m and it is not known how the rest of them will be repaid if they call in their loans.

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