Cabinet backlash on leaks hits Blair

Minister and aides question survival of 'New Labour' brand

Tony Blair suffered a cabinet backlash yesterday over the spate of damaging leaks that have destabilised the Government as ministers urged him to concentrate on substance rather than presentation.

Tony Blair suffered a cabinet backlash yesterday over the spate of damaging leaks that have destabilised the Government as ministers urged him to concentrate on substance rather than presentation.

A cabinet minister and a Downing Street adviser questioned the survival of the "New Labour" brand as the fall-out from a fourth leaked memo from the Prime Minister's inner circle scuppered the Government's attempted fightback from its recent troubles.

As Mr Blair left for a G8 conference in Japan, Downing Street accused the Government's opponents of orchestrating a campaign to wreck this week's launch of its three-year public spending programme.

Labour's efforts to focus on Gordon Brown's £43bn boost to public services suffered another setback when some members of the Bank of England's Monetary Policy Committee expressed fears that the spending hike could force it to raise interest rates.

Mr Brown distanced himself from the latest leaked memo by Philip Gould, Mr Blair's opinion pollster, who said the New Labour label had become "contaminated" and the party was facing a close fight with the Tories at the next election. The Chancellor, who said he had not seen the document, said: "People don't expect us to spend our time reading memos like this; they expect us to get on with the job."

David Blunkett, Secretary of State for Education and Employment, said: "There will be a lot less memos and a lot more straight talking." He suggested there was a mole in Downing Street with a grudge against the Government.

Allies of John Prescott, Deputy Prime Minister, said he opposed "government by focus group", a reference to Mr Gould's interviews with small numbers of key voters, which informed his three memos leaked in recent weeks.

Clare Short, Secretary of State for International Development, said the "new" parts of Labour were causing the Government problems. She said "spin" had confused people, because it did not reflect Labour's record and values.

Some Blair aides doubt the wisdom of retaining the New Labour brand after three years in power and want it to be quietly dropped before the next general election. Others say it needs to be "redefined" or "modernised".

But Alastair Campbell, Mr Blair's press secretary, insisted the Prime Minister would stick to his mantra that "we were elected as New Labour and we will govern as New Labour". He said Mr Blair would continue to take advice from Mr Gould despite attempts by some Labour MPs to make him the scapegoat for the embarrassing leaks.

Martin O'Neill, Labour chairman of the Trade and Industry Select Committee, said: "I think he [Mr Gould] is crazy and I think the problem rests with people like him as much as anything. Some people who have influence and power in the decision-making, like Gould, are unduly simplistic and probably aren't all that good at their jobs."

Downing Street pointed the finger at the Government's political opponents, accusing them of trying to distract attention from the public spending programme.

The Tories refused to confirm or deny they were involved in the leaked memos reaching the newspapers. William Hague challenged Mr Blair in the Commons over the documents, saying their analysis of where the Government was going wrong was "spot-on".

But the Prime Minister accused the Tories of seizing on the disclosures to avoid talking about the spending blueprint and revealing how they would find £16bn of cuts.