Contest opens for Smith's mantle: Party in mourning hopes for early leadership decision

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GORDON BROWN, the shadow Chancellor, still considers himself a potential candidate to succeed John Smith as Labour leader despite signs of rapidly increasing support for his friend and ally Tony Blair, the shadow Home Secretary.

That became clear yesterday amid mounting expectations that the Labour National Executive, meeting on 25 May, will agree to bring forward the contest to succeed Mr Smith after his sudden death on Thursday. David Blunkett, the party chairman, said yesterday that after the current period of deep mourning within the party it would start moving 'sensibly but quickly' to resolve the leadership. The opinion within the party was that this should be by mid-July.

The prospect of a July contest reduces the chances of an informal treaty - canvassed by Lord Healey and some left-of-centre MPs - under which John Prescott, Labour's traditionalist employment spokesman, would stand as deputy on a unity ticket with the moderniser Mr Blair as the leadership candidate. Margaret Beckett, the deputy leader, could not be challeged before the October party conference, unless she decides to stand for the leadership herself or vacates the deputy leadership in the interests of party unity.

Although Mr Brown has refrained from public comment on the leadership issue since Mr Smith's death, he has told inquiring MPs that he will be discussing the issue with Mr Blair this weekend.

As tributes to Mr Smith continued to pour in yesterday it looked as though no decision between Mr Brown and Mr Blair will be settled before Mr Smith's funeral in Edinburgh next Friday; but signs were that the two men will not run against each other.

Mr Brown's reluctance to eliminate himself from the contest conflicts with the estimate of some senior Shadow Cabinet members that Mr Blair commands much wider support as a potential vote-winner, particularly among English MPs who regard the South as a critical electoral battleground.

While both men will wish to test their support there is a strong probability that Mr Brown would stand down if an accelerating bandwagon for Mr Blair proved unstoppable.

Although the Labour leadership issue remained highly fluid yesterday it looked increasingly as though Mr Prescott was the likeliest candidate to stand from the left.

The timing of the Labour contest prompted growing doubt in government circles yesterday over whether it would now be wise for John Major to reshuffle his Cabinet soon after the serious defeats still expected for the Tories in the European Parliament elections on 9 June.

There were suggestions among senior Tories yesterday that with the internal pressure on Mr Major's leadership relieved by Labour's tragedy, and with Labour likely to show a fresh face with a new leader changing shadow Cabinet portfolios in July, it would be more sensible for Mr Major to wait until September before changing his Cabinet.

Mr Major defiantly told his critics last night he intended to see through his term. Addressing the Scottish Tory party conference, subdued by the death of Mr Smith, the Prime Minister made it clear he would not resign. Reminding the Inverness conference that he had won a five-year mandate in the last general election with 14 million votes, he said: 'We are not yet half way through and I intend to complete it.'

A Gallup poll in today's Daily Telegraph shows the Conservatives in third place. The poll, taken before Mr Smith's death, shows Labour down 6 points at 45.5 per cent, the Liberal Democrats surging to 25 per cent and the Tories at 24.5.

Funeral arrangements, page 2

Leading article, Blair profile, page 16

Letters, page 17