Tony Blair builds new £60m 'empire' at heart of Whitehall

Tony Blair is building himself a Prime Minister's department in the heart of Whitehall. Blair is consolidating his empire in newly-refurbished listed buildings running from Trafalgar Square to Downing Street.

The £60m project, codenamed New Accommodation Project Whitehall, will bring all of new Labour's spin doctors and recently formed "cross-cutting" units within walking distance of each other in a vastly expanded Cabinet Office. The Cabinet Office claims the project is just a reorganisation of its staff, but Dennis Kavanagh, author of The Powers Behind The Prime Minister, is in no doubt what the move signals.

Mr Kavanagh said: "Mr Blair is creating a Prime Minister's department without calling it such because that would look too imperialistic."

Senior civil service sources confirm that Mr Kavanagh's analysis is accurate and the building work is the brain child of Sir Richard Wilson, the Cabinet Secretary, who has been ordered by Blair to reconstitute the Cabinet Office as a "tool" of Downing Street.

Mr Kavanagh said: "Sir Richard was told to find a way to build the Cabinet Office around the Prime Minister in order to support his policies, priorities and overall strategy."

He added that the Cabinet Office was an extension of Downing Street in all but name. "Consolidating the Cabinet Office will effectively consolidate Blair's power," he said.

Since Labour was elected, Blair - with the help of Sir Richard - has dramatically expanded Downing Street by beefing up the policy, political and communications units, as well as adding several cross-departmental prime ministerial units to the Cabinet Office.

Blair has also dramatically increased the Foreign Affairs secretariat attached to the Cabinet Office and put his former flat-mate Lord Falconer in charge of the entire operation.

One side effect of the project will be that several listed buildings will be renovated. The buildings, which will all be linked, include Grade 1 listed Ripley House and Admiralty Arch, Grade 2 listed Old Admiralty House, Kirkland House - once owned by Glyn Mills Bank - and the Holl building.

The work is currently going through a consultation process with Westminster Council and English Heritage. However, secret renovation work on Admiralty Arch has already begun to provide hi-tech offices for senior civil servants and ministers. The move will also allow room for the "Prime Minister's" units to expand within 70 Whitehall which is connected directly to Downing Street. The whole complex will not be completed until 2002 but Downing Street sources claim the project is essential if Labour is to fulfil its pledge of providing "joined-up government".

Andrew Lansley, shadow Cabinet Office minister, said it was evident that the department had been annexed by Downing Street.

Lansley said: "The Cabinet Office's historic role is to serve the Government's cabinet committees. Civil servants now complain to me that they feel the Cabinet Office has become Labour territory."

He added: "It is clear that Blair diminished the collective nature of the Cabinet in order to operate a chief executive-style decision making process. That means he needs a Government HQ, and it looks like the Cabinet office is it."

A Cabinet Office spokesman denied the de facto creation of a prime minister's department. He said: "This is just a consolidation and recognition that the Cabinet Office has grown since 1997, needs more space and would be more efficient if it was all on one site."