Blair puts Labour on alert for election

Warning that Heseltine may gain Tory leadership

Tony Blair, the Labour leader, will tonight put his Shadow Cabinet on a "war footing" by issuing a dramatic warning that a general election could take place before the end of the year against a Tory party led by Michael Heseltine.

In a move calculated to inject his party with a controlled bout of election fever, Mr Blair will announce a top-level shake up of campaign duties to give the heaviest responsibilities for strategy and planning to a new Shadow Cabinet "A team" of John Prescott, Gordon Brown and Robin Cook.

The surprise decision by Mr Blair to alert his party to what he is now said to see as the serious prospect of a Conservative leadership coup was disclosed by senior Labour sources as John Major was announcing a new Cabinet committee to "consider the co-ordination and presentation of government policy". It will be chaired by David Hunt, Chancellor of the Duchy of Lancaster.

Mr Major's attempts to restore party discipline were given a fillip last night when the Government comfortably averted another defeat over Europe with a 298-277 Commons vote in favour of a motion "congratulating" it on its approach to the Common Agricultural Policy.

But Mr Blair's election alert was planned in anticipation of a government victory last night and in the event only Nicholas Budgen of the nine "whipless" Euro-rebels qualified for possible re-admission to the party fold at Easter by supporting the Government in the crucial vote. The other eight abstained.

Mr Major's new Cabinet committee - to be known officially as ED(CP) but described by one Whitehall source as the "get your act together" committee - is intended to lift its sights beyond the day-to-day firefighting and news management,at 12 Downing Street.

A full-blown government committee serviced by civil servants, including Christopher Meyer, the Downing Street Press Secretary, and Norman Blackwell, head of the Prime Minister's Policy Unit, ED(CP) is intended to impose a new coherence and strategic sense of purpose to the Government

Its members will include Tony Newton, Leader of the Commons, Lord Cranborne, Leader of the Lords, and the party chairman, Jeremy Hanley, in his role as minister without portfolio. Although the committee has the full approval of Sir Robin Butler, the Cabinet Secretary, as an official, rather than a party, body, the move was immediately interpreted in Westminster as a step by Mr Major not only to improve inter-departmental co-ordination but also to boost public perception of what ministers see as their achievement in securing an economic recovery.

But the biggest political stir today is likely to be caused by Mr Blair's decision to make explicit the possibility of a Tory leadership change. Westminster cynics will argue the Labour leader is seeking to prevent the very outcome he is warning could happen. But Mr Blair is picking up on a fresh bout of speculation on the Tory backbenches that, in the wake of crushing local election defeats this May, Mr Major could face a "stalking horse" challenge in November - of which Mr Heseltine is the most heavily tipped beneficiary at present.

Mr Blair will tell his shadow ministers that Gordon Brown, the shadow Chancellor, will significantly expand his responsibilities to chair a daily meeting of senior party officials responsible for day-to-day strategic planning of the Opposition's assault on the Government.

John Prescott, Mr Blair's deputy, will head a new Regional Commission, which will have a wide ranging inter-departmental brief to examine policy on economic and social regeneration and development.

Robin Cook, the shadow Foreign Secretary, will head a "Star Chamber" intended to unravel some of the biggest policy dilemmas facing the party, not least on issues such as education, health and social services.

Mr Blair will underline the urgency with which he now sees the task of election planning, in the wake of a now certain victory on Clause IV at the conference on 29 April in London, by warning that the election could be "sooner rather than later". He will tell the Shadow Cabinet that development of policy is paramount but he will reassert his warning not to make spending promises in advance of the manifesto.

Andrew Smith, the shadow Chief Secretary, is to meet colleagues to give individual warnings that all ministerial programme planning should begin with shadow teams examining government programmes to identify possible savings.

On the road, page 6

Tories split, page 7