As conflict in the Niddle East escalates, Lord Levy, Tony Blair's special envoy to the region, might be expected to be busy. But Levy's time is taken up by another task he performs for Britain's Prime Minister: persuading wealthy patrons to stump up cash

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nginx/1.14.0 (Ubuntu) for the Labour Party. Those donors, and the Prime Minister he devotedly serves, were bound to be concerned after Levy was arrested last week. Police are investigating possible breaches of the laws governing party funding; 48 people have already been interviewed by the authorities, who hope to determine whether some donors have been promised places in the House of Lords in return for their generosity. Labour is not the only party under scrutiny, but the pledges of impeccable probity made when it came to power in 1997 are coming back to haunt it.

Levy's arrest, said his lawyer, "was unnecessary, disproportionate and ... entirely theatrical." An instinct for showbiz partly explains his prominence. Success in the music industry moved Levy into exalted circles. He met Blair at a 1994 dinner party. A peerage — as membership of the Lords is called — followed three years later.

Not everyone was so lucky. Four men recommended for peerages last year were blocked by the House of Lords Appointments Commission amid concerns that they had recently dipped into their pockets for Labour. One of the men, entrepreneur Sir Gulam Noon, claimed he had been encouraged to omit details of a $460,000 loan to the party from his application form. The police have indicated that they may quiz Blair in the course of their investigation.

"This mess was inevitable," says Labour M.P. and former Europe Minister Denis MacShane. "The Tories had a deeper war chest and we needed money to fight them mano a mano. The only solution is state funding for parties."

• CATHERINE MAYER
• Were British political party sponsors promised seats in the House of Lords?