Labour donations file handed to CPS

Police were called in by the Electoral Commission in November to look into whether £650,000 of donations given by property developer David Abrahams through associates to get round the law requiring political donors to be declared were in breach of party finance laws.

In a statement, Scotland Yard said: "The Metropolitan Police Service have today passed to the CPS the main file of evidence in relation to the investigation into potential breaches of the Political Parties, Elections and Referendums Act 2000 as a result of donations made through intermediaries.

"We have had regular consultation with the CPS since the inquiry began on November 30 2007 and it is now a matter for the CPS to consider the evidence, advise us on whether any further inquiries are necessary and whether any charges should be brought."

The investigation, led by Met Temporary Commander Nigel Mawer, has not led to any arrests, unlike the previous "cash for honours" probe.

One of those at the centre of the controversy, Peter Watt, resigned as Labour's general secretary after it emerged he knew Mr Abrahams had donated large sums of money to the party via friends and colleagues to keep his own name secret.

Mr Abrahams' solicitor said in April that there were "no grounds to proceed with a prosecution" against the Newcastle-based businessman after he gave police "full and open co-operation" in a voluntary interview at home.

Prime Minister Gordon Brown, who called the practice "unacceptable", has instructed party staff, MPs and peers to "co-operate fully in providing relevant information".

The row engulfed candidates in the party's deputy leadership contest who had benefited from cash provided by the proxies but those cases did not lead to full police probes.

However one, former Cabinet minister Peter Hain quit as work and pensions secretary after detectives opened an investigation into more than £100,000 of unrelated undeclared donations to his campaign.