Deputy assistant commissioner John Yates was in his 11th floor office at New Scotland Yard on Tuesday morning when the call came through: he was to lead a criminal probe into the “honours for loans” scandal revealed by this newspaper two weeks ago.

It would be one of the most sensitive inquiries of recent years — but no stone was to be left unturned. “The key to this is to establish whether the offer of a peerage was either made or solicited in exchange for an inducement,” said a source last week.

“The investigation needs to be quick and speedy but not at the expense of thoroughness . . . We’ll do our level best to uncover the truth.”

Sir Ian Blair, the Metropolitan police commissioner, would have had little hesitation in selecting Yates for the job. Articulate and politically astute, the detective has run more than his fair share of high-profile inquiries.

Colleagues quip that he is no stranger to the world of honours, having been awarded a Queen’s Police Medal in the last New Year’s honours list.

They add, however, that his own aggrandisement is unlikely to deter his determination to establish whether anyone — including the prime minister — broke the law.

Within an hour of being given the job, Yates had hand-picked a small team of trusted detectives to work under his direction. By Friday they had dispatched letters to most of the main parties involved, including Downing Street, with a formal request for documents and any other evidence.

“Their (immediate) task is to carry out a scoping study to see who we need to speak to and whether they are a witness or a suspect,” said a police source. “What we’re looking for is bits of paper, letters or e-mails — the paper trail is the key.”

Sources say Yates’s team is likely to interview Lord Levy, the prime minister’s chief fundraiser, and other central players in the affair, including perhaps even the prime minister.

The inquiry is unlikely to end quickly or remain focused exclusively on Labour. As we reveal today, David Cameron, the Conservative party leader, indirectly received £100,000 from a foreign businessman barred from making political donations in Britain.

It separately emerged this weekend that the independent committee that vets nominations to the Lords informally warned all three main political parties a year ago that it was concerned about a link between money and honours.

According to a sitting peer on the Tory benches, the committee became “alarmed” when four out of five people put forward by the Conservatives for peerages turned out to have financial links to the party. Police sources said that if the Yard received a complaint about the Tories they would have to investigate.

“If you go to the heart of the integrity of government, past and present, we’ve got to do it, haven’t we,” the source said.

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