Cash-for-honours lawyer in battle over new £240,000 job

Carmen Dowd is joining City firm Peters & Peters on about £240,000-a-year, doubling the salary she earned as head of the special crime division at the Crown Prosecution Service.

Her move to the firm, which specialises in fraud and commercial litigation, caused concern and was referred to officials to decide whether there was a conflict of interest.

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Worried about criticism that she was joining a firm that acted for Ruth Turner – Tony Blair's Director of Government relations – the CPS tried to delay her departure for a year to distance her from the affair.

Miss Turner was arrested during the honours investigation along with Labour fundraiser Lord Levy, former head teacher Des Smith and wealthy party donor Sir Christopher Evans, a biotechnology entrepreneur.

Sources say Miss Dowd, 42, threatened legal action against the CPS before a deal was reached that allowed her to join the firm.

It was Miss Dowd who announced last summer that after a 16-month police investigation costing £1million, there was "insufficient evidence" to prosecute any of the 136 people interviewed – including Tony Blair – over allegations knighthoods and peerages had been awarded in return for Labour donations.

According to Whitehall sources, the CPS tried to delay her departure because it was concerned she had knowledge about a number of sensitive cases like the honours inquiry and alleged wrongful convictions.

Miss Dowd's resignation was referred to the Cabinet Office, whose lawyers told Director of Public Prosecutions Sir Ken Macdonald that they could not delay her departure.

A compromise was reached and Miss Dowd agreed to a 12-month "cooling off" period being back-dated to July 2007, when she was last involved with the cash-for-honours case. She is due to join Peters & Peters as a fraud and regulatory lawyer on August 4.

Legal sources said Miss Dowd, who began her career with the CPS as a legal trainee in 1990, was a "great catch" for the firm, but there was no suggestion she got the job because of any involvement with its clients.

In 2003, Miss Dowd took time off work to be treated for breast cancer. When she returned, she handled Operation Cathedral, a worldwide case involving paedophiles on the internet.

Miss Dowd was unavailable for comment. But Peters & Peters partner Keith Oliver said the firm was "delighted" she was joining them.

A CPS spokeswoman said it was not unusual for CPS lawyers to take up roles in private practice.

She added: "Carmen is an outstanding lawyer. It is not surprising other firms would be interested in employing her.

"CPS lawyers are civil servants and in line with Cabinet Office Guidelines, this appointment was subject to discussion with the Director of Public Prosecutions and the matter was referred to the Cabinet Office."