Why Blair may be forced to show his ruthless side

One certain fact is that John Prescott is not in the mood to resign. Neither is he going to give up his grace and favour mansion in Dorneywood, or anything else. He is convinced if he gives any ground at all, his enemies will keep at him, demanding more.

Those photographs of him playing croquet on Dorneywood's well-kept lawn, so damning in The Mail on Sunday, are not quite what they seem. Mr Prescott was not, in fact, supposed to be "running the country" when he was leaning on his mallet. Although Tony Blair was then on a flight to Washington, modern communications allowed the Prime Minister to stay in charge from the sky. He hands over the Government to Mr Prescott less frequently than is often thought.

Mr Prescott's staff are also adamant he was not having an idle day, but was taking a break during a genuine "away day" with senior officials, when he discussed reorganising his office.

He can draw comfort from the knowledge that the Chancellor, Gordon Brown, wants him to stay, to supervise what he hopes will be an orderly transfer of power between the Downing Street neighbours. What Mr Blair thinks is more difficult to gauge.

Last week, it was assumed the Prime Minister - now on holiday - was equally determined to hold on to his deputy for the rest of his time in No 10, to avoid a destabilising scramble for power. But Mr Blair can be ruthless when faced by a cabinet minister who is attracting the kind of bad publicity now being heaped on Mr Prescott's head. Other ministers were thought to be indispensable, until one too many days of bad headlines forced them out, Peter Mandelson, David Blunkett and Charles Clarke included.

And ominously for Mr Prescott, several newspapers have carried the story that he held on to Dorneywood against Mr Blair's better judgement, having pleaded to be allowed to keep it when he let go of his department. He must know the story was leaked by someone in Downing Street, trying to protect the Prime Minister. If Downing Street staff are already prepared to brief at his expense, he must wonder what they will do if the newspaper campaign against him goes on.

But if there is one thing sure to make the DPM tough it out, it is having his old antagonist Mr Mandelson pop up on airwaves dropping a hint to go. What Mr Prescott thinks of Mr Mandelson is no secret: it showed on the day he stood by the Thames looking at a hideous crab. "Peter", he called it.

Should Mr Blair decide on his return that his deputy has become a liability, the first step is straightforward. Mr Blair can take away his title, his place in Cabinet, and his grace and favour homes. He could then appoint a new DPM, or abolish the title. The nightmare scenario for Mr Brown is that somebody else serves as Mr Blair's deputy, and does it so well he begins to look like a potential Prime Minister.

But the risk for Tony Blair would be that a humiliated Mr Prescott might decide he could not then continue as deputy leader of the Labour Party, a job not in Mr Blair's gift. That would trigger an election, with a new deputy emerging at conference in September. Once elected, they would be unsackable. And if the party were faced with the expense of a deputy leadership election, the call to make it a leadership election too would become louder and louder, possibly making Mr Blair's position untenable.

Without Prescott, there is turmoil ahead; with him still in post, the risk of bad publicity never goes away. It is not a happy choice for Tony Blair.