Lord Levy has been dramatically re-arrested in the 'cash for honors' row that is continuing to dominate the news in the UK. The story dominates today's news and front-pages. For the second time Tony Blair's chief and unofficial envoy to the Middle East has been arrested following his arrest last July when he was questioned and released on bail. This time Lord Levy was arrested on suspicion of conspiracy to pervert the course of justice, suggesting that police have broadened their inquiry in an attempt to cover the possibility that they have been prevented from properly carrying out their investigations. Police are known to be following a trail of encrypted emails and electronic trails on computer hard drives as part of their 10-month inquiry. Police detectives are attempting to find documents and emails, which seem to have disappeared. Some Downing Street officials are suspected of colluding over other evidence. Detectives could not find the documents as they attempted to discover whether The Labour Party had been offered honors in exchange for 14m of hidden loans. The latest development comes 10-days after another of Tony Blair's closest aides, Ruth Turner, director of government relations, was also arrested on conspiracy to pervert the course of justice. A spokesman for Lord Levy said he "completely denies any allegations of wrongdoing whatsoever." "Lord Levy went to the police station as asked. He was interviewed again and left the police station early afternoon. Since there is a continuing investigation he will not make any further comments at this time." The peer was released on bail on Monday night pending further inquiries. Downing Street refused to comment on Lord Levy's re-arrest, but the development will fuel speculation that Tony Blair, who has already been questioned in the inquiry, may be questioned again by detectives before they conclude the 10-month inquiry. The police are investigating whether peerages have been offered in exchange for donations and loans to political parties after it was revealed at the beginning of last year that all three major parties were given secret loans before the last general election. Traditionally there is no wrongdoing in lending political parties money however the suspicion is that the lenders are trying to buy influence. Tony Blair has been accused of selling peerages after four businessmen, who gave Labour 4.5m in unpublicised loans, were subsequently nominated for peerages. Labour went on to reveal it had been secretly loaned nearly 14m ahead of the last election. The Conservative Party revealed they had borrowed 16m from 13 wealthy backers and the Liberal Democrat party 50,000 from three backers. Lord Levy is a prominent and respected member in the Jewish community in the UK, he is both a philanthropist and fundraiser for charity. Since 1992 he has been chairman of Jewish Care, one of the UK's biggest charities, and has helped raise as much as 60m for the charity. He is also a member of the Board of Deputies of British Jews. An accountant by trade, Lord Levy had major success in the music industry. In 1972 he set up Magnet Records. In 1998, he sold Magnet to Warner Brothers in for 10m and later set up another record company, M&G Records, which he sold in 1997. After meeting Tony Blair at a dinner party in 1994, hosted by Gideon Meir, a senior Israeli Foreign Ministry official, the two soon became tennis partners and good friends. Following Labour's election victory in 1997, he was made a life peer by Blair. In 2000, the prime minister made Lord Levy his personal envoy to the Middle East, with an office inside the Foreign and Commonwealth Office. He is a loyal and avid supporter of Israel and has a second home in Tel Aviv.