Blair says Brown has no veto on Cabinet reshuffle

Tony Blair declared yesterday that Gordon Brown does not have a veto over his Cabinet appointments and said he would reshuffle his team later this week on the basis of ability rather than party factions.

Tony Blair declared yesterday that Gordon Brown does not have a veto over his Cabinet appointments and said he would reshuffle his team later this week on the basis of ability rather than party factions.

At his monthly Downing Street press conference, the Prime Minister was thrown on to the defensive by the surprise resignation on Monday of Andrew Smith, the Work and Pensions Secretary, a close ally of the Chancellor. What should have been a relatively straightforward reshuffle has turned into a trial of strength between Mr Blair and Mr Brown.

The Prime Minister, who is expected to announce his changes in the next 48 hours, is trying to persuade Alan Milburn, the former health secretary, to return to the Cabinet and has him in mind for an election role. Mr Brown, who views Mr Milburn as a long-term rival for the Labour leadership, oppposes the move. Sources said last night that Mr Milburn was undecided about returning to the Cabinet less than 15 months after quitting to spend more time with his family.

Mr Blair sought to play down the renewed tensions with Mr Brown, insisting that the Government was "the most ideologically united" for a very long time. He stressed what aides later called a "team leadership" approach in which the Chancellor is a major player but Mr Blair is the captain.

The Prime Minister denied claims that there were "policy differences" between him and Mr Smith, who was said to oppose Downing Street's demands to cut the bill for incapacity benefit.

Mr Smith appealed to people to take his resignation at face value. "I didn't have a bust-up with the Prime Minister over benefit reforms," he said. "When you do a demanding job your family really do pay the price. I'm glad to be able to have more time with them."

The Prime Minister had only returned from a month's holiday yesterday looking tanned but less than his usual bouncy self and, at times, almost weary. Perhaps the terrible events in Russia had affected his mood - or was it developments closer to home?

A year ago, some Blairites saw the Chancellor's "real Labour" speech at the party conference as an attempt to mount "a coup". A fragile peace was brokered and Mr Brown appeared to put his campaign for the leadership on hold. Yesterday, rifts between the two camps were reemerging over rumours that Mr Milburn was beingh lined up to replace Ian McCartney as party chairman.

Why do passions run so high about the Labour chairmanship? A leading Blairite explained: "It's not about who chairs meetings about the election campaign. The real battle is about the manifesto we fight the election on and the policies we would adopt in a third term. Alan Milburn wants a radical, Blairite platform, while the Brownites favour more of a safety-first approach. If Alan has an election role, he will have a big say in the manifesto. Gordon doesn't want that."

The Blair camp also believes their man is more likely to stay on longer if the manifesto contains radical reforms. Team Brown bitterly resents the suggestion that the Chancellor is not a "moderniser", pointing to the independence of the Bank of England and plans to cut more than 100,000 civil servants. The Brownites insist they want a forward-looking manifesto, but not a repeat of what they regard as half-baked initiatives from Team Blair.

Among MPs returning to Westminster yesterday holiday smalltalk was swiftly overtaken by the cabinet reshuffle and the latest Blair-Brown row. One leading anti-war MP said: "Brown could get Blair out, if he is willing to strike. A lot of Labour MPs would support Brown if he did so."

An ally of the Prime Minister said: "Gordon must have sanctioned Andrew Smith. He wouldn't have done that without consulting Gordon. And it has put Gordon's tanks on Tony's lawn."Tory MPs, meanwhile, turned the looming reshuffle into a spectator sport, trying to guess who was due for the chop as ministers trooped through the Members' Lobby. A senior "one nation" Tory said: "We are as quiet as the grave compared to the Parliamentary Labour Party. But that is part of the problem."

THE BLAIRITES

Alan Milburn

Brown's arch-enemy, hated as much as Peter Mandelson. Seen as Chancellor's most dangerous rival in leadership stakes. Clashed with him on health reforms.

Peter Mandelson

Not forgiven by Brown for backing Blair as leader in 1994. Twice forced to resign from the Cabinet. Brownites opposed a second return. Now European commissioner.

David Miliband

Ex-head of No 10 policy unit, and MP for South Shields in 2001. Now Schools Standards minister and tipped for cabinet post. Brother Ed is senior Treasury adviser to Brown.

Stephen Byers

Close friend of Milburn. Resigned as Transport Secretary after row involving his adviser Jo Moore, who said 11 September was a "good day to bury bad news".

John Reid

Health Secretary and loyal Blairite. Has held five cabinet posts. Safe pair of hands who often handles media interviews. An outside bet to take on Brown in future leadership poll.

Alan Johnson

Former postman and union leader, now tipped for the Cabinet. As Higher Education minister, impressed Mr Blair by blocking Labour backbench rebellion over tuition fees.

Tessa Jowell

Blair's cheerleader in the Cabinet. The Culture Secretary was among loyalist ministers who urged him to carry on after a "wobble" this spring. May not survive Brown succession.

Charles Clarke

Former chief of staff to Neil Kinnock, Education Secretary is a bruiser and, like Mr Reid, one of the few Cabinet ministers prepared to stand up to Mr Brown. Possible contender in leadership contest.

Alastair Campbell

Resigned as No 10's director of communica-tions a year ago over the BBC's claim that the Government "sexed up" Iraqi weapons dossier. Still has a hotline to Blair. May seek to become Labour MP.

THE BROWNITES

Nick Brown

Ex-Labour chief whip PM dropped from Cabinet. Led backbench revolt on university tuition fees but backed down. His attack on Mr Blair was seen as sign Brown was rocking the boat.

Ed Balls

Brown's closest aide for 10 years, he stood down this summer after being chosen as Labour candidate for Normanton. Bound to be major figure in future Labour governments.

Yvette Cooper

Minister for Deputy PM. Married to Ed Balls and MP for Pontefract and Castleford, next door to the one he will fight. Brownites think her rise has been stalled by Mr Blair.

Andrew Smith

Resignation provoked a new outbreak of hostilities between the Blair and Brown camps. Formerly Brown's number two, he could return under a Brown premiership.

Alistair Darling

Transport Secretary. Regarded as a safe pair of hands by Blair but is closer to Brown. Ex-chief secretary to the Treasury, he is tipped as Chancellor in a Brown government.

Gavyn Davies

Former economics adviser to Brown who was in the City before becoming chairman of the BBC. Resigned after Hutton. His wife, Sue Nye, is Brown's political secretary.

Jack Straw

Managed Blair's campaign for the leadership in 1994 but has gradually moved to the Brown camp. Formed axis with Brown on several issues, including the pledge to hold a referendum on the EU constitution.

Douglas Alexander

Cabinet Office minister and campaigns co-ordinator. Seen as Brown protégé but avoids faction-fighting. Sat on National Executive Committee when Blair denied Brown a place.

Geoffrey Robinson

Ex-Jaguar Cars CEO who became close Brown ally in opposition and Treasury minister in 1997. Forced to resign as Paymaster General with Peter Mandelson over a £373,000 house loan.