Tensions rise as Blair moves his allies into key positions

Tensions between Tony Blair and Gordon Brown resurfaced yesterday after the Prime Minister promoted Blairites to important posts in the reshuffle sparked by David Blunkett's resignation from the Cabinet.

Tensions between Tony Blair and Gordon Brown resurfaced yesterday after the Prime Minister promoted Blairites to important posts in the reshuffle sparked by David Blunkett's resignation from the Cabinet.

The Brown camp is alarmed by Mr Blair's decision to install David Miliband as Alan Milburn's deputy at the Cabinet Office, where he will play a major role in writing the Labour election manifesto. Yesterday, Blair aides said the move would ensure a radical, reforming manifesto for a third Labour term.

Supporters of the Chancellor fear Mr Miliband will push for a new round of public service reforms, including a greater role for the private sector, and headline-grabbing initiatives. "We don't want another load of gimmicks," said one Brown ally.

Mr Brown has a close interest in the manifesto because he is the clear front-runner to succeed Mr Blair and does not want to be saddled with commitments he may be reluctant to implement as Prime Minister. He has already been sidelined by the appointment of Mr Milburn to the pivotal election role which Mr Brown played in 1997 and 2001, and Mr Miliband's new post will increase his concern.

Senior Labour sources predicted a battle between the Blair and Brown camps over the contents of the manifesto in the new year. "It's going to get bloody in January," one said.

Mr Miliband, who looks certain to enter the Cabinet if Labour wins a third term, saw his previous post as School Standards minister go to Stephen Twigg, a junior minister in the Department for Education and Skills and another Blairite. He will be number two to Ruth Kelly, who was promoted to the Cabinet on Wednesday after Charles Clarke moved to fill Mr Blunkett's shoes at the Home Office.

Mr Twigg was succeeded by his namesake Derek Twigg, whose post in the Government Whips Office was given to James Purnell, a former Blair aide who first entered Parliament in 2001.

Although the loss of Mr Blunkett is a severe blow to Mr Blair, close allies said the reshuffle showed he was determined to put his stamp on the Cabinet and the manifesto that would decide the policies for a third Labour term. "We will breathe new life into Blairism by bringing on a new generation of Blairites," said one aide. The comments were seen as a warning to the Brown camp that Mr Blair intends to secure his New Labour legacy before he stands down as Prime Minister.

Mr Blunkett's sudden exit failed to end the controversy over the residence visa granted to the nanny of his former lover, Kimberly Quinn. The former home secretary said he failed to recollect an exchange of a fax and e-mails between his office and the Immigration and Nationality Department after the nanny was told her application could take up to a year.

Yesterday, the Opposition suggested there had been a "cover-up" designed to save Mr Blunkett's political skin.

David Davis, the shadow Home Secretary, said: "It is possible that Mr Blunkett forgot about this. But it stretches credulity that the Permanent Secretary, his Private Secretary, the head of the Immigration and Nationality Department and all the civil servants involved in this forgot and were unable to recollect what happened. Was there an attempted cover-up right at the beginning of this?"

Mr Davis wrote to Sir Alan Budd, the former Treasury official whose report on the affair will be published next week, asking whether documents had been shredded or deleted from Home Office computers.

No 10 denied there was a "cover-up" but Mr Milburn hinted that some Home Office officials may face difficult questions after the Budd report is published. "These are issues that will need to be dealt with by Alan Budd," he said.

An ally of Mr Blunkett said he was "shocked" when Sir Alan told him on Tuesday about the fax and e-mails, saying he could not remember them. "These are guys working 14-hour days, every day - and all this happened 20 months ago. It is not collective amnesia, it is simply a classic cock-up of the sort you get in a giant bureaucracy," he said.