Bitter and bruised, he feels betrayed by all the mutterings against him

JOHN PRESCOTT and Tony Blair agreed to kiss and make up yesterday, but fellow ministers believe that they will both bear "scars on their backs" after their rift in the past few days.

"Prescott is still very sore," one Cabinet minister said after yesterday's weekly meeting agreed to close ranks and launch a fightback on how the Government is delivering its pledges to improve public services.

On Tuesday, the Prime Minister infuriated his deputy by speaking of the "scars on my back" left by public-sector workers who were resisting change. Mr Prescott thought this would further alienate Labour's traditional supporters, who he is keen to win back after they abstained in their masses in last month's Euro elections.

But some cabinet colleagues detected another motive for the Deputy Prime Minister's immediate strike back at Mr Blair, in which he made a trenchant defence of the public sector. "He is very riled by the muttering against him over transport," one minister said. "It has really got under his skin."

Mr Prescott has long targeted what he calls the "teenyboppers" and "faceless wonders" in the Downing Street policy unit, who he believes have undermined his attempts to tackle congestion on Britain's roads because Mr Blair does not want to be seen as "anti-car". But his simmering irritation boiled over on Tuesday when The Independent revealed that Mr Blair was to order him to "get a grip" on transport policy. It said Labour's private polling had shown transport problems rising quickly up the political agenda.

Mr Prescott felt betrayed; he blames Downing Street's obstructionism - and the failure of Gordon Brown, the Chancellor, to provide more Treasury cash - for the delay in turning his vision of an integrated transport system into reality.

Mr Prescott had endured months of derision because the legislation he needed was delayed by Downing Street. Repeatedly, he told Mr Blair that he needed parliamentary time for his Bills. If Mr Blair's advisers thought otherwise, he had to remind the Prime Minister that he had signed up to the international targets agreed at the Kyoto summit to reduce greenhouse gases. The only way he could live up to those promises was to get more people out of their cars and on to public transport, he said.

In the middle of his battle with Downing Street, and with exquisite bad timing, Mr Blair's motorcade got held up in the tailbacks alongside the bus lane on the M4 motorway which Mr Prescott had ordered as a trial for speeding up commuter buses into London. Mr Blair was embarrassed when his driver used the bus lane, on the grounds that it was a security risk for the Prime Minister to be delayed too long. Mr Prescott was lambasted in the press when the incident leaked and privately protested loudly to No 10 that the source of the stories was trying to undermine his position. Publicly, he refused to lose his cool.

During the past two weeks, the strain on Mr Prescott became intolerable. He privately confided in friends that he believed the sniping was not coming from Mr Blair or Alastair Campbell, his official spokesman, who gets on well with Mr Prescott and acts as a go-between when relations between the two men become strained.

The criticism was lower down the food chain than that, Mr Prescott believed. His office even obtained transcripts of Mr Campbell's briefings for political correspondents, which acquitted him.

Mr Prescott's bite back at Mr Blair had a familiar ring to it; he has blown his short fuse in the past in order to send a "thus far, no further" message to Mr Blair. "He is a volcano who erupts and then goes quiet again until the next time," one Prescott ally said.

Most of the time, Mr Blair and Mr Prescott get along reasonably well; they know they need each other. But Mr Prescott sometimes feels excluded from the tight Blair inner circle. Similarly, some of Mr Blair's aides regard Mr Prescott as an irritating drag on the New Labour project. They suspect this week's outburst was partly aimed at securing his position - and those of his key allies - in the cabinet reshuffle later this month.

The Deputy Prime Minister will be keen to secure a cabinet promotion for the Industry minister Ian McCartney, and to save the skin of Alan Meale, a junior minister in his own department, who has been tipped for the sack. Following this week's row, the reshuffle will be carefully analysed to see whether Mr Blair is "stroking" his deputy to calm him down or losing patience. The most likely outcome is a beefing up of the transport team, but by agreement with Mr Prescott, not imposed on him.

Although some Blair aides would like to break up the unwieldy Department of Environment, Transport and the Regions, this will not happen - at least this side of the general election. Despite yesterday's soothing words from No 10, some aides believe Mr Prescott is part of the problem rather than the solution.

"We have a giant bureaucracy and a minister who cares passionately about transport - but that does not make a coherent policy," one Downing Street aide said. "There has been administrative chaos and we now need a New Labour, cutting-edge, crystal-clear approach." Another problem, Mr Prescott's critics say, is his refusal to delegate. "The trouble is that John wants to run [transport] himself, and all the other bits of the department. He won't allow transport ministers to get on with the job," a cabinet source said.

Gavin Strang was seen as lightweight; John Reid was a good operator who wanted to relieve the traffic jams but was told by Mr Prescott that the environment must come first. Insiders at the department say relations between Mr Prescott and Helen Liddell, the current Transport minister, are cool.

Cabinet colleagues believe Mr Prescott has failed to win adequate funds to head off a transport crisis because of fundamental differences with Mr Brown. The Chancellor wanted to privatise the ailing London Underground, while Mr Prescott wanted it to remain in public ownership. The compromise was a public-private partnership now seen as a "dog's breakfast".

One MP close to Brown said yesterday: "Prescott has failed to deliver at transport. His attacks on spin-doctors and teenyboppers are just a diversion; he is looking for someone else to blame."

Are These The `Faceless Wonders'?

GEOFFREY NORRIS

One of the men in the policy unit who John Prescott is likely to have had in mind when he dismissed the "faceless wonders" who criticised his transport strategy. When his policy paper was leaked Mr Prescott condemned the "teeny-boppers". The clash was regarded by the Prime Minister as too dangerous to continue. He bowed to Mr Prescott's demands and removed the transport brief from Mr Norris leaving him to concentrate on trade and industry.

PHILIP GOULD

The former advertising executive is now one of the most influential modernisers in the Blair camp. He runs a strategic and policy consultancy with Bill Clinton's polling aides. He delivers to Mr Blair regular reports on the pulse of the `Daily Mail' vote from Labour focus groups, a reliance on which has earned the contempt of Mr Prescott in the past. He proposed closer links with the Liberal Democrats in his book "The Unfinished Revolution".

PETER MANDELSON

Hardly faceless but he remains a shadowy influence on Downing Street. The Prescott campsuspect Mr Blair was following Mr Mandelson's advice in seeking confrontation with the public sector, thus diverting attention from the ministerial reshuffle `tittle tattle'. Yet a clash with Mr Prescott resulted.

Mr Mandelson and Mr Prescott agree on one thing. It is not the right time for Mr Mandelson's return.

JOHN REID

Chain-smoking Scot, former aide to Neil Kinnock, has made no secret of the fact that he wanted full Cabinet responsibility when he was Transport minister to enable him to do the job properly, before he was promoted into the Cabinet as Secretary of State for Scotland after devolution. Mr Reid may have been the target for Mr Prescott's outburst about "the personal egos that certain politicians want to develop. They are looking for a safe Cabinet job."