Levy 'feels let down and is about to turn on the Labour Party'

Lord Levy has fuelled fears he is about to turn on the Labour Party after telling friends he is furious at the lack of public support from senior ministers.

The cash-for-honours investigation increasingly threatens to split Tony Blair's inner circle asunder in a welter of recrimination.

Friends and family of the two key suspects, Lord Levy and Ruth Turner, fought a battle for public sympathy last week as the show of unity began to unravel.

Now a cabinet minister close to Tony Blair's chief fundraiser has raised the stakes, telling The Independent on Sunday that Lord Levy "feels badly let down".

"He feels that he has given the party everything. He's helped raise between £60m and £80m for us. Without that money we might not be in government, and yet people are not standing by him.

"He feels badly let down, not so much by Blair but by others who he feels could be showing a bit more public support right now."

Downing Street has tried desperately in recent days to reassure Lord Levy he is not being made a scapegoat as the year-long police inquiry draws to a close.

Mr Blair has told his aides that there is no plan to "hang Levy out to dry", according to one minister with close links to Downing Street.

"Michael [Levy] might not be everyone's cup of tea but there is a recognition of what he's done in the past. Tony has made it clear that there is not, nor should be, any question of hanging Levy out to dry."

The peer has been arrested and questioned under suspicion of conspiracy to pervert the course of justice as part of the police investigation into whether honours were sold for cash.

The only other member of Mr Blair's inner circle to have been arrested is Ms Turner, who was questioned under suspicion of perverting the course of justice.

It emerged last week that Ms Turner had sent an internal document to Jonathan Powell, Mr Blair's chief of staff, alleging that she was being pressured by Lord Levy to "shape" her evidence to police. Another aide, John McTernan, Mr Blair's political secretary, is said to have given police details of a meeting to discuss peerage nominations at which Lord Levy lobbied for Labour donors.

Mr Blair made a public show of unity, not with Lord Levy, but with Mr Powell, choosing to walk to a cabinet session at his chief of staff's side on Thursday.

For months Lord Levy hasbeen publicly silent, but he now appears to befighting back through friends. Yitzchak Schochet, a rabbi at the Mill Hill synagogue that Lord Levy attends, Sir Alan Sugar and David Rowan, editor of The Jewish Chronicle, have all rallied to his defence in recent days.

"There is a general feeling that this is all about 'get the Jew'," Rabbi Schochet told The Daily Telegraph.

Some ministers fear that Lord Levy is about to "implode". "If Michael [Levy] were to feel that Tony has left him to swing in the wind over this one he would be a very dangerous animal," a minister told The Times.

Although most media attention is now focused on whether there was an attempt to cover up a sale of honours, suggestions that police have abandoned the rest of their investigation are wide of the mark.

A senior figure close to the probe said the issue of whether both main political parties broke the law by hiding donations as "loans" was still "live".

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