The move to Millbank Tower will have a strong symbolism for left-wingers who resent the power of its campaign co- ordinator, Peter Mandelson. They have christened Mr Mandelson and his fellow modernisers the "Millbank Tendency".
There could also be controversy over the name of the new headquarters - the Walworth Road building was renamed John Smith House in 1994, after the party's former leader. A Labour spokesman said the party planned to give its Millbank headquarters the same name, but last night the owners, Legal & General, said it had no right to do so.
Several government departments have offices in the same building along with companies such as Vickers, the engineering firm which built it. It is thought they might object to the change.
Further trouble might be afoot because since Labour started work on its media centre in 1995, the building has been chosen for historic listing.
Completed in 1963, it was among 40 post-war buildings picked for listing by English Heritage and is grade II listed, putting it among the top 5 per cent of historic buildings in Britain. Any changes - including new name plaques - would have to be approved by the Conservative-controlled Westminster City Council.
Legal & General's spokesman confirmed that Labour had taken out a further five-year option on the tower, but cast doubt on the possibility of a name-change.
"In our view they have no renaming rights outside the building. They haven't said anything to us about that. Anything they want to do with the outside of the building would have to be discussed with us," he said.
The Millbank project had aroused suspicions from the start that it was to be the party's headquarters. Although it was supposed to accommodate only the press office plus extra staff during the election, it can take up to 300 people - easily enough for the party's entire staff.
About pounds 2m was spent on refurbishing two floors of the building, which houses the auditorium used for press conferences throughout the election campaign. Labour occupies 25,000 square feet of offices, for which it has paid more than pounds 500,000 over the past two years. The rent will go up later this year from pounds 13.40 per square foot to pounds 15.00.
Although Labour only moved to Walworth Road from Transport House in 1981, the decision to leave the headquarters will be a poignant one for many. Millbank has increasingly been seen as the home of new Labour, while the party's roots remained in the building near Elephant and Castle in south London.
However, Millbank Tower is five minutes' walk from Westminster and has a commanding view of the Thames, while Walworth Road is two miles away and can boast only the lurid pink Elephant and Castle Shopping Centre.Reuse content