Some senior ministers intend to demand that Mr Whelan be ousted when the Cabinet holds its next meeting on 14 January, if he is still in his current Treasury post by then.
Those understood to want Mr Whelan moved include Jack Straw, the Home Secretary; Jack Cunningham, Mr Blair's cabinet "enforcer"; David Blunkett, the Secretary of State for Education and Employment; Frank Dobson (Health); Mo Mowlam (Northern Ireland), and Chris Smith (Culture).
But they face opposition from Mr Brown, who is reluctant to lose one of his closest aides, and John Prescott, the Deputy Prime Minister. Mr Prescott believes it would be wrong to oust Mr Whelan when there is no evidence he was involved in leaking details of Mr Mandelson's pounds 373,000 personal loan from Geoffrey Robinson, the Paymaster-General, who resigned on the same day as the Secretary of State for Trade and Industry two days before Christmas.
Their fight to save Mr Whelan will be an early test of the new alliance between Mr Prescott and Mr Brown, revealed in The Independent this week, which is aimed at reasserting "traditional" Labour values after the departure of Mr Mandelson, a leading architect of New Labour.
It is believed that Mr Blair has been convinced by close allies, including Alastair Campbell, his press secretary, that it will be impossible for the Government to draw a line under the Mandelson affair if Mr Whelan remains in his present post.
One senior minister said yesterday: "A majority of the Cabinet has made its mind up: Charlie must go. I don't see how he can stay."
Another government source suggested the decision had already been taken in principle to remove him as the Chancellor's spin-doctor, but that he might be found another job.
"What is still under discussion is when he goes and where he goes," said the source.
Mr Whelan's critics admit there is no evidence he leaked details of the loan to the press. But they suspect he may have played a part in its inclusion in a biography of Mr Mandelson by Paul Routledge, a close friend of Mr Whelan, which will be serialised in The Mirror next week.
Friends insist Mr Whelan has "done nothing wrong" and that there are no grounds whatsoever for him to be sacked.
The fall-out from Mr Mandelson's sudden resignation continued yesterday, as Blairite ministers expressed concern at Mr Prescott's decision to flex his political muscles by forming his partnership with Mr Brown and opposing closer links between Labour and the Liberal Democrats. "He's behaving like an excited kid who has just got the Christmas present he always wanted - Peter Mandelson's head on a plate," said one Blair ally.
The Prime Minister was urged to reassert his authority over his Cabinet by Lord Shore of Stepney, the former Labour minister, who told BBC Radio: "If private ambitions and grudges and grievances and disappointments are allowed free rein, and if they are exploited by a number of anonymous PR men on behalf of their masters, that is a recipe for disaster."
Asked if that was happening in Mr Blair's administration, he said: "I think there is a danger of that. It is something I'm quite sure, in his own best interests, the Prime Minister will want to deal with quite firmly."
The departure of Mr Mandelson, who was the Cabinet's strongest supporter of closer Lib-Lab co-operation, is also causing problems for Paddy Ashdown. His critics, who claim he is "cosying up" to Mr Blair, have reopened the Liberal Democrats' intense debate on relations with the Government.
Malcolm Bruce, Treasury spokesman, played down the agreement between Mr Blair and Mr Ashdown to extend the remit of a cabinet committee involving senior Liberal Democrats from constitutional reform to other issues. Mr Bruce said this was only a personal declaration of intent by two leaders.Reuse content