Blairites fear Brown will hijack review

Allies of Tony Blair and Gordon Brown have clashed over the direction of the Labour Party when the Prime Minister stands down.

Although their supporters agree on the need for a wide-ranging debate about how the party should renew itself, differences are emerging about how it should be conducted.

Blairites fired a warning shot at Mr Brown yesterday by saying the Chancellor's wholesale review of government spending must involve a "fundamental reconsideration of Labour's priorities" and not just be of interest to "a few anoraks in the Treasury". Blairites fear Mr Brown will dictate the review's conclusions and say they want the process opened up.

Jim Murphy, the Blairite Minister for Work, told BBC Radio Four: "The fact is that New Labour is much bigger and much more sustained than any individual - Tony Blair or indeed Gordon Brown - although of course they were the two architects ... What we now need is a new environment of ideas that allows New Labour to evolve, not around any individual but around a set of fresh, idealistic, value-based, radically New Labour policies."

As The Independent reported yesterday, Mr Blair has launched a campaign to ensure his reforms continue after he leaves Downing Street, as he is widely expected to do next year. But Brownites say the Chancellor will not be nailed to a 10-year programme drawn up by Blairites.

Stephen Byers, a leading Blairite and former Cabinet minister, likened the spending review to the decision to scrap Labour's Clause IV commitment to public ownership. He said the next year would be "make or break time for New Labour".

Today, Mr Brown hits back at Mr Byers's recent call for Labour to consider scrapping inheritance tax. Writing in the Financial Times, the Chancellor warns against uncosted tax pledges. Returning to the political fray after a break following the birth of his second son, Mr Brown gives an upbeat assessment of the economy.

Doug Henderson, a former minister and Brown ally, suggested that Mr Byers was trying to nail Mr Blair's successor to a Blairite agenda. He said: "He [Mr Byers] may see the future of the Labour Party as a centrist party which always make sure that its policies agree with those at the centre of the economic and social spectrum. I think the Labour Party should be a coalition on the left of the political spectrum."

Both Mr Blair and Mr Brown are wooing the new generation of ministers just below cabinet level. They include Blairites who may feature in a Brown government - unlike Mr Byers and his ally Alan Milburn, dubbed the "Blair outriders", who have infuriated the Chancellor by criticising key policies.

The Prime Minister has asked several young ministers to produce fresh policies for the "second phase of New Labour" - Mr Murphy; the Pensions minister James Purnell; the Health ministers Andy Burnham and Caroline Flint; the Schools minister Jim Knight; the Home Office minister Liam Byrne; and the Cabinet Office minister Ed Miliband.