Key points: Cash-for-honours hearing

Here are the main points as MPs grill the police officer who led the cash-for-honours inquiry and the senior prosecutor who decided not to bring charges:

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Metropolitan Police Assistant Commissioner John Yates began by thanking the MPs on the Public Administration Committee for suspending their own inquiry into cash-for-honours in order that the police investigation could be carried out.

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In opening remarks he said it would be "wholly improper" to level personal accusations against those who do not have right of reply and said it would not be fair to reveal "personal or sensitive" evidence, saying the police have to maintain confidence.

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He said a full report was being prepared for November for the Metropolitan Police Authority.

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Carmen Dowd, the head of the CPS's Special Crime Division, also noted in her opening remarks that there were "inevitably limits" to what can be said.

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She said the nature of the evidence and information gathered and details of the decision making process would not be supplied, in order to maintain confidence in the independence and impartiality of the CPS.

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And she said all individuals connected to the case were entitled to the "presumption of innocence".

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Committee chairman Tony Wright said the committee had agreed to a "short pause" in its inquiry and said when Mr Yates had met the committee in July last year he thought it would be "wrapped up by October", or as early as mid-September - but it in fact had gone on for a year. He asked Mr Yates why he had been so confident the probe would be finished so quickly.

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Mr Yates said he had begun the investigation in the "spirit of cooperation" and many people "had cooperated in full".

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But he said there were instances when they received less than full cooperation. "I think there was a sense that we would ask questions, get some answers and simply go away. That is not how police investigations work".

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He said if they did not get a proper answer, they would go back and ask again until they got one.

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He said it was only in January 2007 that they finally discovered how the relevant honours list had been put together. "I do think, on reflection and in hindsight we were treated as a political problem rather than a criminal problem."

# He would not say who had not cooperated, but listed those which had, saying: "The Cabinet Office co-operated in full throughout, some of the parties cooperated in full throughout in my view, some did not. "

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Asked if anyone had told him Tony Blair might have to resign as prime minister if he had been interviewed under caution, he said: "I would expect anybody looking after the interests of someone at that level, to set out a range of consequences."

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He said he felt uncomfortable a number of times during the investigation, which had been subject to immense scrutiny, speculation and some "daft comments" from some MPs.

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"Yes there was pressure. Improper pressure? No I don't think so, would it have made any difference? No, I think not," he said.

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He said leaks had been taken very very seriously and the security around the operation had been "very tight".

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He said the police had worked out that most of what had been written was not by crime reporters but by political reporters.

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Mr Yates strongly denied briefing journalists, saying the investigation was characterised by a lot of speculation. He said stories about Christopher Evans' diaries and Ruth Turner's note were the only significant pieces of evidence leaked in an improper way and he was confident his team had not been responsible.

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Mr Yates said he had looked back to what he had written on 31 March last year, after receiving a complaint from the SNP MP Angus MacNeil, and said he had considered the dangers of the police being seen as impartial or used as a political tool.

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He said he took advice from his own director of legal services and from the director of public prosecutions, but the decision had to rest with the police. He said they had considered the allegations to be "extremely serious".

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He said the whole process of governance had been strictly adhered to to ensure police did not go on a "fishing expedition into areas we should not have gone".

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He said he had received more than 20 complaints in this case - not just the lesson from Mr MacNeil and said "you never know what you're going to find" in inquiries.

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He said if this case was seen as an "aborted police investigation", then 80% of police cases could be described as such.

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Mr Yates was asked if he had a "cavalier" attitude towards the distress felt by those investigated after he described it as "uncomfortable" for them, he said he had taken an oath to be impartial and independent and had stuck by that.

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"I'm sorry if it was an ordeal, I expect anybody who is under a police investigation finds it an ordeal, but I did my job," he added.

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Ms Dowd said if a complaint had been made, a police officer was duty bound to investigate all lines of inquiry but was not out to prove someone's guilt.

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She said there were lots of pieces of evidence that when put together, could look different from when they were considered separately and it was only when the investigation was completed that they could look at all the pieces of evidence together.

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Mr Yates was questioned about the necessity for dawn raids and "beating down the door" in a case of this type, by Tory MP Charles Walker.

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Mr Yates said if, generically speaking, someone is investigated with an ongoing conspiracy to pervert the course of justice, "what you don't do" is put the person investigated "on notice" or tell that person to turn up at the police station with the necessary papers.

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He also said they had not "beaten down the door" during this investigation.

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Mr Yates said a 6am arrest on a high profile person was the "least intrusive" option, arresting someone somewhere private, away from the full glare of publicity.

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He said there was no evidence the police had leaked evidence to the press of dawn raids, describing it as "absolute nonsense" - he demanded of Mr Walker: "Have you got evidence of that?"

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Mr Walker suggested a press officer may have leaked the information - Mr Yates said he worked with people he completely trusted to keep the information confidential.

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Mr Yates said he had been "in discussion" with the CPS throughout the inquiry to double check they were on the "right lines" and to question whether the investigation should stop.

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Asked whether it would ever be possible to prosecute a case under the 1925 Act, he said the law was "pretty straightforward" but any corruption case was always challenging as bargains made were never meant to come to light. "What we did was our job, which was a thorough and detailed investigation into the facts"

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He would not say whether he thought at some stage that the police would be able to press charges, Mr Yates said they had "built the case stage by stage on the evidence" and handed it to the CPS to make the final decision.

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"I may wish I could be judge and juror but that's not my role," he said.

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Ms Dowd would not answer questions about whether a diary, described a Sunday Times article as "dynamite", had been ruled inadmissible as evidence.

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"I think it's an inappropriate question in terms of the evidence and the facts of the case and we're going to have to decline to comment," she said.

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But Mr Yates did say they had raised suspicions when they came across them in early September.

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Ms Dowd said the nature of an investigation is not only about finding evidence to convict people, but to find evidence to exonerate people as well.

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She said work between the police and CPS had been exemplary and they had worked closely together from the outset.

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Asked whether he had spoken to a software company about getting technology that could "resurrect" e-mails - Mr Yates said he was not sure, but he didn't want to comment as it was straying into "evidential areas" and it was not proper to comment on it.

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David Perry QC, who advises the CPS, said the case had been presented as a "jigsaw" and it was difficult in the early stages to know "exactly what picture you are going to get at the end". He said it would have been "wholly inappropriate" to look at the material in a "piecemeal fashion".

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He said they had looked throughout at the difficulties created by the structure of the legislation but it was impossible to pre-empt the outcome without first knowing the "shape of the evidence". He said they were "alert to the difficulty" of prosecuting the case.

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Mr Yates said the lack of consistency and transparency for nominating working peerages meant it was "very difficult" to find a way through it. He said all three parties seemed to have different processes for nominating people in the first place.

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"It all felt a bit ad hoc in terms of how it gets to Holac" (The House of Lords appointments committee).

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Mr Yates said the cost of the investigation was a factor in considering a proportional response - saying it was "around £1m" but said three quarters was salary costs. "This was a criminal allegation of the most serious nature which we were duty bound to investigate," he said.

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Asked if it was "good value for money" - he said "that's for others to judge". He denied it was a "disaster for the police", saying it would have been a disaster if his operational independence had been compromised.

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He said it was "absolutely proper" that the police should have investigated the case - rather than leaving it to MPs.

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Asked whether he was concerned that the attorney general had not ruled himself out, he said it was not a matter for him to comment on and was "one for the DPP and the attorney general".

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On whether it had helped or hindered his career, being involved in the case, Mr Yates said: "I think that's probably for others to judge".

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Asked to define a commercial loan, Mr Yates said it was an important point, as lending money to a political party should not be a bar to being nominated for a peerage. "At the moment there is no definition of a commercial loan that I know of.. and I think it is a big gap in the law that it is not there".

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Ms Dowd said the Electoral Commission had not been in a position to define what a commercial loan looked like.

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Chairman Tony Wright asked Mr Yates straight whether he had discovered there was a "trade in peerages".

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Mr Yates replied: "I think chair, I've done my job, I followed the evidence, I provided that evidence to the CPS and they made their decision. I don't think I should comment further than that."

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Asked whether he had anything else to add he said he supported Sir Hayden Phillips's call for a stronger regulatory role for the Electoral Commission.