Downing Street handover: The deal

Tony Blair finally gives in to pressure to come up with a timetable for a handover of power to his Chancellor

The illustration accompanies the official account of Mr Blair's week, a document that could be Exhibit A for those seeking to prosecute the case he is living in a parallel universe.

The Downing Street website finds room for the news he had "talks with Latin American leaders" and also that he "met with a group of Muslim women". There is none, however, for meetings of a rather more important nature - those that have ensured that he will be packing his bags and leaving Downing Street for good by next summer at the latest.

As we report today Mr Blair has told a number of his cabinet colleagues that he intends to quit in about a year's time. The private assurances were made under pressure after he was forced to tell Labour MPs that he would give his successor "ample time" to prepare for the next election.

A fuller account of Mr Blair's week would include how he sat in a Commons committee room on Monday and listened to MPs call for him to set a timetable for his departure. It would record how on Wednesday at a second meeting of backbench "shop stewards" one instructed him to "rein in" his chief ally, John Reid.

And no honest history could do without a reference to a humiliating climb-down over pensions policy in which he surrendered control of a key reform to his Chancellor. Even one of Mr Brown's fiercest critics conceded that Mr Brown has won his tussle with the Prime Minister over pensions. "It's game, set if not match to Gordon," he said.

The final victory in his titanic battle to succeed Mr Blair is not yet on - but it would take a brave man to bet against it. Mr Brown is likely to face a challenge for the top job since a number of MPs from the left-wing Campaign group have said they are not prepared to see a "coronation" for the Chancellor. But while he might welcome crushing a left-wing opponent, he is anxious to avoid a challenge from the right. Such a challenge, his supporters believes, could only help the Conservatives to caricature him as Old Labour.

In particular Mr Brown hopes to dissuade John Reid from standing against him. Since the sacking of Charles Clarke, his fellow Scot has emerged as the champion of the so-called "ultras", Mr Blair's most loyal supporters. Mr Reid is said to have called a number of cabinet colleagues since Labour's local election defeat canvassing support for a possible leadership bid. Claims that Mr Reid is holding talks this weekend with Tessa Jowell and Alan Milburn to organise a challenge to Mr Brown were dismissed, however. "That's one for fans of The Da Vinci Code," said one figure alleged to be plotting.

The Chancellor's supporters are gleeful that Mr Reid's dismissal of "an Old Labour coup" backfired last week. The new Home Secretary was sitting behind the Prime Minister at Monday's meeting of the Parliamentary Labour Party when he was explicitly criticised by a moderate and well-respected MP, Kevan Jones.

"He's had the worst week of his political career," chortled an enemy of Mr Reid this weekend. Even his allies concede that he may struggle to mount a credible challenge after alienating moderate backbenchers.

Mr Brown's camp, meanwhile, has been assiduous in exploiting last week's reshuffle to the Chancellor's advantage. One MP, who was expected to be given a job, received a number of sympathetic calls from the Chancellor's allies. It is likely that Mr Brown will also have repeated his well-worn tactic of writing personally to sacked ministers. He has already let it be known that he would bring Charles Clarke back to frontline politics, an offer that may complicate Mr Clarke's own leadership calculations.

A leading Blairite said: "There is no such thing as dead cert in politics but Gordon is the closest you are going to get."

This mood of weary resignation is informed by the knowledge that Mr Blair needs his Chancellor to get through any of his remaining reforms starting with the Schools and Inspection Bill that completes its Commons passage later this month.

A so-called "decommissioning strategy", in which mainstream MPs call on Mr Blair to quit straight away, is being held in reserve should he once again claim that he will serve a "full third term". All the calculations may come to nought, however. As one MP said: "At the moment this Government is having a crisis every two months. Who's to say Blair can survive even one more?"

Then there is John Prescott's position as national laughing stock. His cabinet colleagues report that he is "depressed" and may quit. Should he do so he could trigger a race for the deputy leadership, a contest that could be even more bitter and divisive than the race for the top job.

Faced with the prospect of months of civil war against a background of successive crises, it is perhaps not so surprising if No 10 prefers to spend its days in its own universe of sunshine and children.