Cabinet reshuffle as Blair prepares EU battle

Tessa Jowell, the Culture Secretary, is tipped to take over as chairman of the Labour Party as Tony Blair prepares for two big tests - the general election and the referendum on the new EU constitution, agreed early yesterday morning.

Tessa Jowell, the Culture Secretary, is tipped to take over as chairman of the Labour Party as Tony Blair prepares for two big tests - the general election and the referendum on the new EU constitution, agreed early yesterday morning.

The Prime Minister was accused yesterday of flying in the face of public opinion by agreeing to the new EU constitution barely a week after the European elections in which the Conservatives took first place and the UK Independence Party, which believes in outright withdrawal from the EU, came third.

The Foreign Secretary, Jack Straw, denied yesterday that Britain had "given away anything" during a tense EU summit, marked by a public row between Mr Blair and the French President Jacques Chirac. "Overall it is a very good deal," Mr Straw claimed.

But the shadow Foreign Secretary Michael Ancram said that it was "incredible" that ministers were defending a constitution that the Government initially opposed.

When Mr Blair faces the Commons tomorrow, he is likely to be challenged to call a promised referendum without delay, but will buy time by insisting that it must be scrutinised by Parliament before it is put to the popular vote.

Ms Jowell's move, which is likely to be the main feature of the Cabinet reshuffle that Mr Blair is preparing before MPs leave for their summer break, will position her to be the public face of the Labour Party in both the general election and the referendum.

She would be expected to side with the Prime Minister in the behind-the-scenes battle over Labour's election manifesto. With Michael Howard signalling that the Conservatives intend to make health and education the big election issues, Mr Blair wants Labour to put together a "radical" manifesto promising greater consumer choice, which Labour traditionalists see as a threat to the principle of equal access for all.

The current chairman, Ian McCartney, is vulnerable because of the party's poor showing in this month's local elections, when Labour was beaten into third place

Another reason for wanting a "Blairite" party chairman is that Mr Blair is facing the simultaneous loss of two of the advisers who have seen him through previous elections.

Sally Morgan, the senior Downing Street adviser who handles Mr Blair's relations with the Labour Party, has told him she wants to start a new career in the private sector. Baroness Morgan has already had a meeting with at least one public relations agency.

Peter Mandelson, who is possibly Mr Blair's most trusted adviser on political tactics, is now back in pole position to be appointed Britain's Commissioner in Brussels, following the French decision last week to block one of the current commissioners, Chris Patten, from becoming the next Commission head.

That decision will mean another EU summit before the end of June to choose the new President. The pressure will be on Mr Blair to decide before then who the new British commissioners will be.