London, Feb 2 (DPA) A leading figure in the Britain's ruling Labour Party has said police questioning of Prime Minister Tony Blair in connection with a party funding row was having a 'corrosive effect' on the government.

Party chairperson Hazel Blears said Friday that the so-called cash-for-honours investigations were overshadowing the government's domestic agenda.

The government confirmed Thursday that Blair had been questioned as a witness by Scotland Yard investigators for a second time last week in connection with the affair.

The allegations, denied by all involved, focus on whether or not political favours, such as peerages or titles, were awarded to wealthy Labour Party donors in return for huge secret loans they gave to the party.

Some British newspapers said Friday that Blair was now 'fighting for survival' to stay in office at least until May, when he will have completed 10 years as prime minister.

Blair, under intense pressure from his party, said last September that he will leave office before September 2007, to hand over power to a successor, most likely to be Gordon Brown, the chancellor of the exchequer.