Levy's 'blind loyalty' defended

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Businessman Sir Alan Sugar has defended Labour fundraiser Lord Levy as the police inquiry into claims honours were exchanged for party loans continues.

He described Lord Levy as having "blind loyalty" to Tony Blair and a man who put his "life and soul" into raising funds for the Labour Party.

But Sir Alan said it "is looking like [Lord Levy] is a scapegoat".

Lord Levy has denied any wrongdoing. The PM's official spokesman said Sir Alan was entitled to his personal view.

The police investigation into allegations that honours were being sold was launched last year.

But it has switched focus to allegations of a cover-up, with the BBC being temporarily banned from reporting concerns expressed by a Downing St aide about Lord Levy's role in drawing up the Honours List.

This is a man who has blind devotion - I don't know why - to Tony Blair Sir Alan Sugar

Sir Alan, who said he was speaking "from the periphery" of the affair, said: "It is looking like he is the scapegoat...like he is being set up as the bad guy".

Sir Alan, a Labour donor himself, described Lord Levy as a "very, very good fundraiser".

He told BBC Radio 4's Today programme Mr Blair should appreciate Lord Levy's role - "Levy raised a lot of money for his party and assisted him to get elected."

The police investigation has been going on for a year, with more than 90 people, including Mr Blair, being interviewed. All deny any wrongdoing.

'Scandal'

"This is a scandal and when you think about it you have to ask yourself 'what's in it for Levy?' Sir Alan said on BBC Radio 4's Today programme.

"This is not a man who has lined his own pocket, this is not a man who has done some insider trading dealing or something like that in the stock market and has stolen from shareholders.

"This is a man who has blind devotion - I don't know why - to Tony Blair, blind loyalty for Tony Blair and has gone out and blagged people for money for the party.

"That to me is his worse crime," he said.

The prime minister's official spokesman said: "We have said that the prime minister's view of Michael Levy and Michael Levy's role has not changed."