AS the police investigation into claims Labour offered peerages in return for cash continues, SARA NELSON speaks to Bromley's Conservative MPs to hear their views on the matter.

The probe began in March last year after four people nominated for honours were found to have made large loans to the Labour Party ahead of the last election.

Labour's treasurer and other officials claimed not to know about the loans and the matter has seen Prime Minister Tony Blair questioned by police twice.

On Tuesday, the Crown Prosecution Service announced Des Smith would not face charges.

The headteacher and ex-government adviser was arrested last year over claims he said donations to city academy schools could lead to an honour.

The inquiry will now focus on the original cash-for-peerages claims and a potentially more serious investigation into whether there has been a cover-up.

Beckenham MP Jacqui Lait thinks the inquiry is damaging politics as a whole.

She said: "There have been allegations for a very long time that people who do good and contribute to a political party are in essence buying peerages.

"I want to believe there are many very good and socially committed citizens who are also politically active and I don't find that reprehensible. What I do find reprehensible is if it is proven (which it has not yet been) that a peerage has been given in exchange for cash.

"It is not a black and white issue, there should be recognition to those which are committed to their country and that can mean they are committed to a political party.

"There are huge sums of money passing between people which the Labour party has owned up to. People are drawing a conclusion. Until the police have finished their enquiries we just don't know.

"I think the whole row has done a huge amount of damage to the political system in this country.

"My concern is as a result taxpayers could fund politics and I find that even more worrying for the health of the political system in this country.

"There is a current amount of public money to support the work of parties in parliament but that is a very different thing.

"While the stench of corruption hangs over donations and peerages we are never going to get people to trust the political system."

Bromley and Chislehurst MP Bob Neill said: "It is an awful mess that the Government has got itself into; the idea that money buys its way into the legislature is corrosive to public confidence.

"We will have to see how the investigation goes but it seems like everybody is getting tarred with the same brush. People will think all politicians are potentially corrupt and this is only fuelling that cynicism.

"The way the Government is behaving is just making a bad situation worse. It is trying to rubbish the police's reputation and that is extra corrosive. It is trying to use the police as a political punchball."

Making reference to Labour's 1997 manifesto in which it criticised Conservative MPs who had taken cash for questions, promised to "clean up politics" and "end sleaze", Mr Neill said: "Some of our people made mistakes but one of the worst things in life is hypocrisy."

He added: "What's more this just illustrates what a lame duck the Prime Minister has become - when is he going to go? That's all anybody is interested in."

Orpington MP John Horam said: "People making donations to buy peerages is completely wrong, but British Politics are extremely clean in comparison to those many other places.

"What we need is a better system. The Conservatives are proposing to put a limit on the amount of money that can be spent on campaigning and we think there should be a cap on individual donations.

"All that would eliminate the need for these secret loans Mr Blair seems to have encouraged and will make the whole process much more transparent.

"Obviously people have a right to support and back a political party, but it should be open to the public gaze."

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Looking back over cash for honours case:

Febuary 6, 2007: CPS say no charges to be brought against Des Smith due to "insufficient evidence".

February 1, 2007: News Tony Blair was questioned by police a second time on January 26 is made public. Mr Blair was interviewed as a witness and was not arrested.

January 30, 2007: Labour chief fundraiser Lord Levy is re-arrested and questioned on suspicion of conspiracy to pervert the course of justice. He is released on bail and denies any allegation of wrong-doing.

January 24, 2007: It emerges John McTernan, Downing Street's director of political operations, was questioned a second time during the previous week. He was re-interviewed under caution.

January 23, 2007: It is revealed Scotland's First Minister Jack McConnell was questioned by police (not under caution) in December.

January 19, 2007: Downing Street director of government relations Ruth Turner is arrested and questioned over honours allegations and suspicion of perverting the course of justice. She denies any wrongdoing and is backed by Mr Blair.

December 14, 2006: Tony Blair is interviewed by police as a witness, not a suspect. This is thought to be the first time a serving Prime Minister has been questioned by police during a criminal investigation.

November 16, 2006: Scotland Yard says police have interviewed 90 people and expect to submit a file to the CPS.

November 8, 2006: News reveals all members of the Cabinet, apart from Tony Blair, at or around the time of the 2005 general election, have been contacted by detectives.

October 23, 2006: Former Conservative leader Michael Howard says he was interviewed by police investigating the allegations. He was not under caution.

October 2, 2006: Four Conservative donors, including a businessman whose nomination for a peerage was blocked, have been questioned by police, it is revealed.

September 29, 2006: Downing Street adviser Ruth Turner is questioned by police.

September 21, 2006: Biotech boss and Labour lender Sir Christopher Evans is the third person arrested in the probe.

July 16, 2006: Tony Blair says nobody in his party has sold honours for cash to his knowledge.

July 14, 2006: It emerges Labour donor Lord Sainsbury and ex-party chairman Ian McCartney have been questioned by police.

July 12, 2006: Lord Levy is arrested and bailed by police in connection to the investigation.

July 10, 2006: The BBC reports Lord Levy told curry tycoon Sir Gulam Noon he did not disclose his £250,000 loan to Labour on his nomination form to the House of Lords.

June 22, 2006: Lord Levy is questioned by a committee of MPs looking at the party funding system.

May 16, 2006: The Lords' Appointments Committee, the body which vets nominations for peerages says it has sometimes been kept in the dark about political loans.

April 28, 2006: Scotland Yard examines claims Labour offered the late Independent MP, Peter Law, a peerage if he refused to stand in the last election. Labour call the allegation "categorically untrue".

April 21, 2006: Police announce the inquiry into loans to political parties will be widened back to 2001.

April 18, 2006: Mr Smith says he will contest all the allegations made about him.

April 13, 2006: Des Smith, a headteacher involved in the Government's city academics project, is arrested and bailed by police in the probe.

March 30, 2006: Police confirm they are looking at other political parties as well as Labour in relation to the investigation.

March 27, 2006: Police ask a committee of MPs to put their inquiry into the "cash for peerages" claims on hold.

March 24, 2006: It is revealed Labour's former general secretary Matt Carter wrote to wealthy businessmen telling them their loans would not have to be declared.

March 21, 2006: Scotland Yard announces it is examining complaints that Labour has broken laws about selling honours.

March 17, 2006: Labour confirms it was secretly lent £14m ahead of the 2005 election. Wrongdoing is denied as loans made to political parties on commercial terms did not have to be disclosed.

March 16, 2006: Labour's elected treasurer, Jack Dromey, says he did not know donations had been made to the party by wealthy businessmen and promises to investigate.

March 12, 2006: The BBC reports Mr Patel lent Labour £1.5m.

March 8, 2006: Chai Patel protests to the vetting committee for Lords' appointments that his nomination to be a peer has been blocked.