As the Treasury announced an independent investigation into the Co-operative Bank its former chairman, Paul Flowers, was released on bail.
The former Co-op bank chairman faces five investigations. But by the time the City watchdog's inquiry reports the row may be all forgotten.
Ed Miliband has told ITV News that Labour behaved with "complete integrity" over the scandal surrounding the Co-op bank and Paul Flowers.
Two men have been arrested over allegations of supplying drugs to former Co-op chairman Paul Flowers.
Mr Flowers, 63, a Methodist minister was suspended by both the church and the Labour Party following allegations that he bought and used illegal drugs.
A West Yorkshire Police statement said: "As part of an ongoing investigation into allegations of drug supply offences made in a national newspaper, West Yorkshire Police have today arrested two men aged 26 and 34.
"The 26-year-old was arrested at an address in the Thornton area of Bradford and the 34-year-old detained at an address in the Armley area of Leeds. They are being questioned at separate West Yorkshire Police Stations.
"A 63-year-old man arrested on 21 November in the Liverpool area, in connection with the same incident, is currently on bail."
The Conservatives have returned to the "Nasty Party", shadow home secretary Yvette Cooper has said, after Education Secretary Michael Gove accused Labour leader Ed Miliband of "coquettish reticence" when dealing with scandals involving his party.
Speaking on BBC One's Andrew Marr Show, she said: "What we've seen recently is a real deterioration in the nature of the politics the Tory party's pursuing. It is a return to the Nasty Party.
"I don't think John Major would ever have done this. I don't think Margaret Thatcher would have done this."
The police could be called in to investigate the Co-operative Bank if a review finds any evidence of criminal activity, the head of a City regulator has said.
Financial Conduct Authority chief executive Martin Wheatley said regulators would only know whether laws had been broken when they had more information.
Mr Wheatley told the BBC's Sunday Politics, "There are a number of specifics that we will be looking at which potentially lead to investigations, which could date back to the original takeover of Britannia and indeed relate to other events over the last five years".
Asked if there could be a police investigation into the handling of the bank, he said: "It depends. There might be if there's criminal activity, that's something we will only know when we get more information".
Conservative Party chairman Grant Shapps has insisted Ed Miliband's response over the Co-operative Bank row was "ludicrous" and stepped up pressure on Labour over the merger deal with Britannia.
Mr Shapps told the BBC's Sunday Politics there were "conflicting reports" about how much the Labour leadership knew about former Co-op Bank boss Paul Flowers' past, which included him standing down as a Labour councillor after pornography was found on his computer.
He said, "Arguing about what they knew and when, I think there's a much bigger issue here. This morning you have got Ed Miliband saying 'we don't have to answer any of these questions', they are somehow all smears. This is ludicrous".
Labour has denied this, saying Mr Miliband and shadow chancellor Ed Balls did not know the reason why Flowers quit in 2011.
Education Secretary Michael Gove has accused Labour leader Ed Miliband of "coquettish reticence" when dealing with scandals involving his party.
Speaking on BBC One's Andrew Marr Show, he said that Labour had a tendency to "clam up":
– michael gove, education secretary
One thing that I think is slightly sort of off is that Ed Miliband has been a great advocate of transparency, judge-led inquiries, all the rest of it, but whenever anyone asks questions about the Labour Party, then he has a sort of coquettish reticence.
Labour leader Ed Miliband has hit out at David Cameron for using the Paul Flowers scandal to attack his party's links to the Co-operative movement.
Writing in The Independent on Sunday, Mr Miliband said the Prime Minister "demeans his office" by resorting to a strategy of mud-slinging ahead of the 2015 General Election.
He claimed Mr Cameron had "hit a new low" at Prime Minister's Questions by using the Co-op Bank's near collapse and its former chairman's high-profile troubles to score political points, using a strategy of "fear and smear".
He said: "The public deserves better than the desperate attempts by the Tory party to score the cheapest political points, including ludicrous claims that Labour's historic links with the Co-op movement were the invention of Rev Flowers."
A man has been arrested and later bailed by police investigating a plot to kidnap a male escort allegedly linked to the disgraced former chairman of the Co-op Paul Flowers.
– Greater Manchester Police
On Thursday, police in Salford received a report that a 31-year-old man had received threatening text messages to his mobile.
On Friday, a warrant was executed at an address in Radcliffe and a 29-year-old man was arrested on suspicion of conspiracy to kidnap. He has been bailed pending further inquiries. This investigation is at an early stage and inquiries into the nature of the threats are ongoing.
A man has been arrested by police investigating a plot to kidnap a male escort allegedly linked to the disgraced former chairman of the Co-op Paul Flowers.
A series of allegations have been made against Paul Flowers in the media since he stepped down from his position at the bank.
Greater Manchester Police have questioned a 29-year-old man on suspicion of conspiracy to kidnap, after a 31-year-old received threatening text messages.
The damage done at the Co-operative Bank is "not good" for the wider co-op movement, the leader of its political branch as acknowledged.
Co-operative Party chair Gareth Thomas, a Labour frontbencher, said problems at the bank had to be sorted out but insisted the wider movement was doing well despite a series of scandals around former Co-op Bank chairman Paul Flowers.
Mr Thomas told BBC Radio 4's Today programme: "I was not aware of what happened in Bradford or some of the other disclosures that have come out.
"He has been suspended by both the Labour Party, and indeed by the Co-op Party, and I believe that's the right thing that's been done both by Ed Miliband and by the decision that we've taken ourselves."