LONDON, Jan 28: Detectives investigating the infamous cash-for-peerage case have discovered a hand-written note from Prime Minister Tony Blair which is understood to acknowledge the efforts of Labour’s 12 secret lenders who provided £14 million to help the party fight the 2005 election.

A report in Sunday Telegraph claims the note by Mr Blair is the first indication of a ‘paper trail’ leading directly to the prime minister.

The note, among a batch of Downing Street papers obtained by detectives has widened significantly the cash-for-honours investigation.

The prime minister had written in ink the note on typed, internal government papers and initialed his views.

Officers now believe that Downing Street intended to give working peerages to most of the lenders. Those in line included Sir Christopher Evans, the multi-millionaire entrepreneur, who is the only lender arrested as part of the 10-month inquiry.

Detectives are preparing a dossier that seeks to prove criminal intent: that at least some of the loans were linked directly to the promise of a peerage. Senior ministers privately acknowledge that the affair is one of the main reasons for the erosion of Mr Blair’s political power.

Elfyn Llwyd, the Plaid Cymru leader and one of two MPs whose complaints sparked the police investigation, said: “This shows that the prime minister has many questions still to answer. I remain absolutely convinced that police will need to interview Tony Blair again.”

One cabinet minister said that he agreed with those Labour MPs who want the prime minister to step down before his preferred exit date of June if any senior Downing Street figure is charged.

Ruth Turner, Sir Christopher and Lord Levy, Labour’s senior fundraiser, remain at the heart of the police investigation: all three deny acting illegally.

Detectives do not necessarily think there is sufficient evidence to bring charges against the prime minister. But he is increasingly likely to be called as a witness if charges are brought against senior aides.

On Saturday night, No10 denied the existence of an incriminating document written by the prime minister.

Meanwhile, it was learnt that Tony Blair’s most senior aide Jonathan Powell, Blair’s chief of staff, was questioned as a suspect shortly before Ruth Turner.

Detectives are focusing their attention on a key meeting thought to have been attended by Blair, Powell and Lord Levy, Blair’s chief fundraiser, in the summer of 2005.

The meeting discussed the prime minister’s forthcoming list of nominees for the House of Lords, and how to reward Labour’s financial backers. No minutes are thought to have been taken.