A leading Tory donor at the centre of the police probe into the cash-for-honours affair has been questioned under caution, it was reported today.
Robert Edmiston, the head of automotive IM group, loaned the Conservative party £2 million, and has since said he does not want to be repaid the money.
The multi-millionaire was nominated for a peerage, which was blocked by the House of Lords watchdog in relation to tax issues.
An investigation by The Times names Mr Edmiston, along with donors Lord Laidlaw, Lord Ashcroft and Swedish businessman Johan Eliasch as the rich benefactors who had been questioned.
Shadow chancellor George Osborne would not comment on the reports, but said the Tories were committed to introducing new policies that would help "clean up" politics in Britain.
"The story is actually something about something that happened many months ago," he told Radio Five Live this morning.
A Guardian investigation on Sunday placed the Tories at the centre of "secret" funding allegations at Coleshill Manor in the Midlands Industrial Council. But the Conservatives insisted the Constituency Campaigning Services centre (CCS) based there was not part of the party, and should not be subject to normal party procedures.
Tory leader David Cameron admitted on Sunday that Coleshill was part of the party, and - refusing to name who they were - said he had met the Tory backers from the Midlands Industrial Council.
According to the Electoral Commission's guidelines, "regulated donees" should be members of registered parties or individual holders of elective office, or members associations.
Labour chair Hazel Blears wrote to Tory deputy chair Lord Ashcroft demanding an explanation and today challenged David Cameron over his party's pledge to "clean up politics".
"He could make a good start by addressing the growing number of questions about his own party's finances," she said.
"He needs to be open and transparent about the Midlands Industrial Council. This body, chaired by Robert Edmiston, has given hundreds of thousands of pounds to the Conservative Party in recent years - including to Cameron's own constituency party - but the names of the businessmen who give money through the Council are kept secret.
"Yesterday, David Cameron said he knew who they are and has indeed met them, but he won't tell anybody else. If he is truly committed to openness then he must name them."
John Hutton, Labour's work and pensions secretary, echoed Ms Blears' calls to name "these secret backers who are bankrolling Tory campaigns".
"These stunning admissions by David Cameron raise serious questions about the Tories' secret funding arrangements," he said.
Tony Blair's personal fundraiser Lord Levy, Des Smith, a head teacher and member of the specialist schools and academies trust, and businessman Sir Christopher Evans who lent Labour £1 million before the last election, were arrested by the police as part of the cross-party probe. All three have been bailed and protest their innocence.
Last week it emerged Ruth Turner, one of Tony Blair's aides, was questioned under caution by officers from Scotland Yard.
A spokeswoman for the Metropolitan police today refused to discuss anyone being questioned as part of the ongoing cash-for-honours investigation.