He also cites the John Prescott affair with his diary secretary for potentially breaching accepted codes of conduct by putting the future of a junior member of staff at risk.

Though Graham has previously been critical of government decisions, the severity of his attack on the prime minister and senior colleagues is unprecedented and is bound to cause embarrassment at a time when the Blair leadership is already tarnished as “sleazy”.

He says that Blair, while making reform and delivery of public services a priority, “sees standards as a peripheral, minor issue not worthy of serious consideration”.

He adds: “Opinion polls [show] the public think this government is as sleazy as the last. He [Blair] has paid a heavy price for ignoring standards.”

It emerged this weekend that further arrests may be “imminent” in the investigation into the alleged loans-for-honours scandal, according to sources on the parliamentary committee probing the affair, which met with officers last week. It was also reported police had obtained documents that gave their investigation an “added significance”.

Graham, whose committee was formed after the Tory “cash-for-questions” scandal in the 1990s, is responsible for ensuring the highest standards of “probity in public life”.

In the interview he reveals his frustration at Blair’s reluctance to adopt his recommendations on improving politicians’ behaviour.

On cronyism, he says: “We have given recommendations as to how the government could address that. They accepted many of our recommendations but they didn’t accept those.”

Overall, he says: “We would have preferred more positive support from the prime minister.

“We suspect he is pretty lukewarm to the work we do, though it is interesting where we suggested changes to improve ethical standards in local government, it [the government] accepted all of those recommendations because it was helpful to it.”

Graham says the alleged loans-for-honours scandal has been particularly damaging to the trust between the public and politicians. Sainsbury’s secret £2m loan to Labour had led to an “unhappy situation”.

“That really causes difficulty for everyone. If a political party is relying on ministerial financial contributions that we are not immediately aware of, I think that is very damaging.”

On Prescott’s two-year affair with a civil servant, Graham is equally forthright: “You can get a situation where a minister is subject to such ridicule and scorn that their position becomes very difficult . . .”

“My position is, ‘Is there clear evidence that in pursuing their private matters they [the ministers] have taken advantage of their public position, or breached accepted codes of conduct in fulfilling their public duty?’

“If you involve a junior member of staff you increase the risk. There is a duty of care as far as any member of staff is concerned.

“I always think it is very important that people shouldn’t put members of the civil service they may have been working with at risk, as far as their future career is concerned.”

Graham believes, in the wake of cash-for-honours, that he should be involved in discussions about the future funding of political parties. He says: “I’m apprehensive how the public are going to react to some cosy deal stitched up in a smoke-filled room . . . I think it is an unfortunate approach.”

Over the past few weeks Downing Street has tried to regain control of the agenda with a series of policy announcements on nuclear power, criminal justice and pensions that have diverted attention from scandals.

However, in the interview, Graham, who started his career working for the Civil and Public Services Union before taking on roles on government bodies, says Blair’s failure to tackle sleaze head-on is set to damage his legacy and his reputation.

“The public perception [of sleaze] is pretty grim, and that is a warning to politicians to change their behaviour,” he said.

Treasury sources confirmed Brown had met Graham last month and was “appreciative” of his recommendations. “Gordon was happy to hear his [Graham’s] views and is quite appreciative of them,” said the source.

Graham has no formal power to investigate complaints about individual ministers but believes that recent problems have become so pressing that new safeguards are now necessary. “This government has not been as rigorous as it should in establishing procedures,” he said.

He believes an independent figure should be appointed to study alleged breaches of the ministerial code, which is currently policed by the prime minister.

Graham also lambasts the government for failing to tackle electoral fraud. Postal voting has been extended to everyone to encourage higher turnouts. But the government has ignored independent advice that individuals should register to vote rather than households. Critics have suggested that this is because more rigour would hit Labour’s share of the vote.

Graham says: “It might be argued there was a party-political interest. There was a fear that if you increased the integrity of the electoral register, you might put at risk — particularly in inner-city areas — who exactly was on the register. And there might be party advantage in how these matters are dealt with.

“It’s not a very satisfactory situation where the professional body [the electoral commission] is saying one thing and the government is doing something else . . . it undermines trust in our democratic system and anything that does that is very worrying.”

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