Tony's friends

In the embarrassing fall-out of Cheriegate, it seems that all of the Blair camp's efforts to woo the Daily Mail have come to nought, reports Andrew Grice

A week ago, Tony Blair and his closest advisers were confident that the latest battle in their long war with the Daily Mail would end in a landmark victory for them over the newspaper most hostile to the Government. Now, the Blair camp admits, it has suffered a damaging defeat, all the more painful because it is at their hands of the old enemy.

Labour has long fretted about the ability of the Mail to set the agenda for Fleet Street and, crucially, the broadcasters – even though the Mail likes to portray rival papers and the BBC as supine and afraid to hold the Government to account. So, when The Mail on Sunday revealed Cherie Blair's links with the convicted con man Peter Foster eight days ago, Blair aides were delighted that the story received only a muted follow-up in the newspapers and was ignored by the BBC.

Alastair Campbell, Downing Street's director of communications and strategy, even hoped the story would prove a watershed. "What was significant was that the BBC and the other papers did not really want to run with it because they believed it was part of a personal campaign against the Blairs," said one No 10 insider.

Those hopes, which now lie in shatters, help to explain Campbell's barely concealed fury at Cherie Blair for not admitting, when the story broke, that Foster did help her to buy two flats in Bristol. Not only have the Government's efforts to abandon "spin" been severely set back; the Mail has been proved right, and the rest of the media will be more likely to take it seriously in future.

The case for the defence of Cherie Blair has rested, in part, on her hatred of the Mail – a feeling that is, of course, mutual. Relations between the Mail and the Blair camp have been in deep freeze for a couple of years. Paul Dacre, the paper's editor, will break bread with ministers such as Gordon Brown and David Blunkett, but has not met Blair or Campbell since before last year's general election. Blair and his communications chief, who meet all the Fleet Street editors, are quite happy to see Dacre; it is he who does not want to meet them. The contrast with Rupert Murdoch's empire could hardly be greater; that has regular, close contact with No 10, and, whatever disagreements there are on policy, both sides work hard to "do business".

The current froideur with the Mail is a far cry from the late 1980s, when Blair, a rising star on Labour's front bench, was quite happy to sup with the devil. "We've had Brown and Blair here, but Neil Kinnock [then the Labour leader] just refuses to cross the threshold," the late Sir David English, a former Mail editor, once told me.

Kinnock was acting in an honourable tradition. The Mail has been demonised in Labour circles since it played a key role in evicting the first Labour government from office in 1924 by publishing the forged Zinoviev letter inciting British Communists to violent revolution.

On becoming Labour leader in 1994, Blair tried a new approach. The tabloids, notably the Mail and The Sun, had crucified Kinnock. So Blair decided to go on a charm offensive, and was highly successful. The Sun switched sides, urging a Labour vote at the 1997 election, while the Mail's support for the Tories was lukewarm. The late Lord Rothermere sent palpitations through the Mail hierarchy by deciding to take the Labour whip.

The honeymoon with the Mail continued for a while after Blair became Prime Minister. He was praised by columnists such as Paul Johnson and Simon Heffer. But then the Mail reverted to type. Dacre judged some of Blair's rhetoric – notably on welfare reform and the family – as empty. With much of the media still in love with Blair, and the Tories showing little sign of becoming an effective Opposition, the Mail's editor decided to take on the mantle himself. Dacre told one Labour figure: "Blair has only ever been in real trouble twice – on foot-and-mouth and the fuel protests. The Tories haven't managed to touch him, and someone has got to expose what he's doing."

A Blair aide agrees: "The Mail spent most of our first term pouring shit over us, and yet we still won a big majority and remain broadly popular. That explains Dacre's rage." The Blair camp is convinced that, because the Mail cannot mount effective attacks over policy, it is getting personal. "Dacre can't accept that we are for real, so he says we are phoney. He acts as though we wake up every morning and ask: 'What evil can we do today?' "

Associated Newspapers first tasted victory when Downing Street withdrew its complaint to the Press Complaints Commission about claims in The Mail on Sunday and the London Evening Standard – and The Spectator – that Blair tried to win a more prominent role in the Queen Mother's lying-in-state ceremony. As with Cheriegate, No 10 insists that some of the main allegations were untrue, but perception is all.

The Mail rarely misses an opportunity to get under the Blairs' skin, whether it is by running a story portraying Cherie as a Lady Macbeth figure or by printing an unflattering photograph of her. The paper has, perhaps mischievously, heaped praise on Brown. In a rare interview, Dacre told the British Journalism Review in September that Blair was "a chameleon who believes what he said to the last person he talked to" but described Brown as being "touched by the mantle of greatness". The tactic has not gone unnoticed in Downing Street. "Gordon is shrewd enough to know that, if he gets the top job, the Mail will do to him what they do to us now," said a Blair adviser.

In turn, Labour is not above tweaking the Mail's tail. Some Labour MPs think Blair has cosied up to Richard Desmond, owner of the Daily Express, partly to annoy Dacre, who attacked the Blairs for their "moral elasticity" in courting a man he has described as "appalling" and a pornographer. The Blair camp denies the charge, saying it is "just professional" to meet all media proprietors and editors. Blair has met Desmond only once; Campbell has met him twice. Desmond's £100,000 donation to Labour turned out to be more trouble than it was worth.

The blunt truth is that the mighty Mail matters far more than the Express. With the Tories showing little sign of a fight-back, Dacre's crusade against the Government will continue. In a revealing editorial on Saturday, the Mail excoriated the Tories for refusing to attack over Cheriegate, saying: "If they can't get their teeth into the scandal of a mendacious No 10 press machine and the issues of truth, trust and accountability, it is difficult to see that they have any useful function at all." The following day, Iain Duncan Smith broke his silence on the affair and criticised the Government.