'Honours' evidence could be heard in secret

The Crown Prosecution Service ruled out criminal charges on Friday on the basis that there was insufficient evidence to secure a conviction against any individual.

This leaves the Public Administration Committee free to continue its own investigation into the affair.

Some members of the committee are pushing for key sessions to be held in "private" - excluding reporters and TV cameras.

This would include the evidence given by Met assistant commissioner John Yates.

He is the policeman who led the criminal investigation into allegations that honours were offered to businessmen who bankrolled Labour's 2005 general election campaign.

Some MPs involved are concerned that interviewing him in public would lead to a "trial by committee".

One said: "It is going to take very careful handling to avoid a situation where people are unfairly subjected to a televised trial where circumstantial evidence is produced that is damaging without them having the chance to defend themselves.

"There is a strong case for the hearings to be conducted in private with a report being published that sets out the relevant detail."

But Liberal Democrat and Tory members of the committee last night said it was "vital" the sessions are held in public.

LibDem MP Paul Rowen said: "My view is that there is a lot more to this than meets the eye. While there may be insufficient evidence for a criminal investigation, there are a lot of questions that have not been answered."

Questioned about Mr Yates's appearance before the committee, Tory MP David Burrowes added: "We may need to see him in private first, but then it should be in public.

"The only reason we had him in private before is because there was the danger of prejudicing proceedings. Now there are no proceedings."

It emerged over the weekend that detectives have uncovered evidence showing Downing Street planned to give peerages to eight of the 12 businessmen who lent money to the party in the run-up to the last General Election.

The figure is twice as high as previously thought.

Police also said they have uncovered previously unseen extracts from the diaries of Labour donor Sir Christopher Evans.

The committee is due to meet Tuesday to discuss how to proceed with its long-delayed investigation and to decide whether to question Mr Yates.

There has been speculation that three of those arrested in the police investigation - Labour fundraiser Lord Levy, former Downing Street aide Ruth Turner and biotech mogul Sir Christopher - could be asked to give evidence to the committee.