Analysis By Nick Assinder Political correspondent, BBC News website

The fact that Des Smith is not to face charges in the cash-for-honours probe is the first bit of good news for the government in this year-long affair.

Mr Smith has been described as a peripheral figure

Some have seized on this latest development to claim it might suggest the police inquiry has failed to turn up any concrete evidence over the original allegations.

But no one will be counting any chickens just yet.

The CPS statement said Mr Smith had not been questioned as part of the claims that peerages had been offered in return for loans or donations to political parties.

His involvement was over his role in raising cash for the government's controversial city academies scheme and some "indiscreet and naive" comments he made to an undercover reporter.

The main police inquiry now covers the original cash-for-peerages claims, and the potentially more serious investigation into whether there has been a cover-up.

Third interview

Mr Smith has been described by SNP MP Angus MacNeil - whose complaint sparked the police investigation - as a peripheral figure.

So the latest announcement may indicate little about the wider investigation.

What some in Westminster are now speculating, however, is that it may suggest the whole inquiry is, finally, drawing to a conclusion.

But even that may be premature following the apparent widening of the investigation over the past couple of weeks.

There has been much speculation that senior Blair advisers are to be questioned again, that the prime minister may himself face a third interview with police and even that three individuals may be charged.

But there are precious few hard facts available in Westminster and all those involved continue to insist they are guilty of no wrongdoing.

It may well be there are a few more developments to come before things are brought to a conclusion.

What is certainly the case is that all those involved would like to see that conclusion as soon as possible.