Please submit your concern

Explanation:

Taking no action against Mr. Loyal would not affect either party as he is not directly involved in the murder case.
Suspending Mr. Prodigal from the party would upset Mr. Loyal as it is common knowledge that the latter has a soft spot for Mr. Prodigal, and it might (remote possibility) lead to Mr. Loyal separating from the party.
Expelling Mr. Loyal from the party would obviously affect him as his political repute might be affected. The NPP party will also be affected as it is stated in the passage that Mr. Loyal's followers would part along with him. This entire situation would benefit the opposition party.
Banning Mr. Loyal from party premises till the court case is cleared will affect both parties, but the situation will not be as grave as compared to option 3.
Initiating an internal inquiry may not affect any of the parties as the information of an internal inquiry can be kept away from Mr. Loyal.
Thus, the strongest possibility of both the parties getting adversely affected is presented in option 3. Option 4 is close but can be eliminated on the basis that the effect of Mr. Prodigal's suspension from the party would not directly affect Mr. Loyal, who may still continue with the party.
Hence, the correct answer is option 3.