Tony Blair will carry out a swift cabinet reshuffle in an attempt to show that his Government has not run out of steam after Labour's losses in yesterday's local elections.
Mr Blair will try to go on the offensive by freshening his senior ministerial team and dismissing calls from allies of Gordon Brown for him to announce his departure timetable from Downing Street.
The reshuffle, originally planned for Monday, could now take place as early as today amid fears in No 10 that another weekend of bad headlines could further undermine the Prime Minister's authority. Under Mr Blair's fightback strategy, John Prescott is due to give a live BBC television interview on Sunday in his first public response to the revelation that he had a two-year affair with his diary secretary. Mr Blair will then try to switch the focus to policy by holding his monthly press conference on Monday - only two weeks after his last one.
Although Mr Blair's critics will claim the poor council results mean he is a liability, one loyalist minister said last night: "He still has a lot of fire in his belly and he will show that. There is a lot more he wants to achieve."
As the polls closed at 10pm last night after elections in 176 councils in England, Labour officials were bracing themselves for a disastrous night. They admitted that their hopes of dismissing a predicted loss of about 200 seats as a mid-term protest had been blown out of the water by two weeks of government turmoil including the release of more than 2,000 foreign prisoners, NHS job cuts and Mr Prescott's affair.
The officials forecast that Labour's losses could rise above the 400 mark when the counting of votes is completed. Twelve local authorities delayed their counts until today. Labour strategists, who believe the party will come third behind the Tories and Liberal Democrats, predicted its share of the total vote could be as low as 25 per cent - an even worse showing than at the 2004 local elections, when it managed just 26 per cent.
Labour aides admitted the Prescott affair had provoked a backlash among female voters and that the release of the prisoners without being considered for deportation had scuppered the party's attempt to campaign on being "tough" on antisocial behaviour. They were gloomy about the party's prospects in the crucial battleground of London, where all 1,861 seats on the 32 borough councils were contested yesterday.
The recent crises have also forced Mr Blair to plan his long-delayed reshuffle against a very different backdrop. Allies say he wants Charles Clarke, the Home Secretary, Patricia Hewitt, the Health Secretary, and Mr Prescott to remain in post, but some Labour MPs are pressing for some or all of the three ministers to be moved.
Among the cabinet ministers tipped for promotion are Hilary Benn, the International Development Secretary, Alan Johnson, the Trade and Industry Secretary, and David Miliband, the Communities minister. Hazel Blears, the Home Office minister, who narrowly missed out on promotion to the Cabinet after last year's general election, is expected to join the top table this time. Junior ministers expected to move up the ladder include the Blairites Liam Byrne at Health, and Jim Murphy at the Cabinet Office. Two backbench allies of Gordon Brown - Ed Balls and Ed Miliband - are tipped to become ministers.
Mr Blair, who has promised to quit before the next general election, is said to have a departure date in his mind but is determined not to provoke another flurry of speculation about his exit strategy by making his intentions public.
He has told aides he made a mistake by talking about his decision to pre-announce his retirement in 2004 during a recent visit to Australia, when his remarks overshadowed the trip. "There is no mileage in it; he has got to talk about policy," said one aide.
n Police were deployed at polling stations in the east London borough of Tower Hamlets yesterday to calm fears about intimidation and violence. Council officials said the operation was planned "acting on shared intelligence with the police".
Police also provided a "visible presence" in Bradford, where they began an investigation into allegations of election fraud. A spokeswoman for West Yorkshire Police said: "A small number of allegations of election fraud have been passed to us from the council and we are currently looking into them."
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