Ms Gray had been expected to publish her report within the coming days, but she will now pause work on all of the alleged parties which are covered by the police inquiry.
The Whitehall mandarin can continue looking into events which are not deemed by the Met to merit criminal investigation, and could produce a separate report dealing only with these less controversial gatherings.
The Cabinet Office said Ms Gray’s probe was “continuing” and she is in contact with the Metropolitan Police, but there was no official confirmation of the date she will eventually pass her report to Boris Johnson.
The terms of reference for the Gray inquiry state that if her Cabinet Office team unearths any evidence of “behaviour that is potentially a criminal offence”, they must refer it to the police and their work “may be paused”.
Downing Street confirmed that the Gray team have been passing information to police throughout, but it was not clear whether a particular piece of recent evidence prompted the Met’s decision to step in.
Commissioner Cressida Dick’s bombshell announcement may buy the prime minister a little time, by delaying the flood of letters of no confidence from Tory MPs which had been expected when Ms Gray’s report landed.
If those letters hit the crucial threshold of 54, they could have triggered a vote on his future as prime minister as early as this week.
But it presents an even greater nightmare for the prime minister, as he faces the prospect of being interviewed, handed a fixed penalty notice or even being charged with breaking the law.
It would be the first time that a serving prime minister has been interviewed as a suspect by police, though Tony Blair was interviewed as a witness in the cash-for-honours affair.
The question for many Conservative MPs will now be whether they continue to hold off on forcing a confidence ballot in Mr Johnson’s leadership until after the police probe is wrapped up, potentially in some months’ time.
Some will argue that the prime minister deserves the right to argue his case and should not be deemed guilty until investigations into his role are complete.
But others are likely to conclude that the interests of the party and the country rest in resolving the uncertainty over his position more quickly by putting him to an immediate vote of the Conservative parliamentary party.
If they can muster the necessary 54 letters, Mr Johnson would need the support of more than half his MPs – 180 votes – to remain as leader and prime minister. But this would be a significantly more difficult hurdle to clear with police investigation hanging over his head.
The Met Police investigation is a far more fearsome prospect for the PM than Ms Gray’s inquiry.
The terms of reference for the Whitehall mandarin are to “establish swiftly a general understanding” of the nature of the gatherings at No 10 and other government departments, including attendance, the setting and the purpose, with reference to adherence to the guidance in place at the time.
As well as setting out the facts about the events, she could “if required” establish whether individual disciplinary action is warranted.
Her report is due to go direct to the prime minister, who will himself decide whether any disciplinary action is needed and whether to call in his independent ethics adviser Lord Geidt to look at possible breaches of the ministerial code of conduct.
By contrast, officers in the police inquiry could determine that a fixed penalty notice is required or could even, if the evidence gathered merits it, pass a file to the Crown Prosecution Service for a court case.
With the involvement of the police, what little control Mr Johnson still had over the progress of the partygate affair seems to have slipped from his hands.