Labour faced renewed turmoil over the party leadership last night amid fresh claims that Tony Blair is preparing to stand down as Prime Minister in the spring.
Senior figures believe Mr Blair is considering how to give activists and MPs a clear indication of his intentions at the party's annual conference in September in order to halt continuing unrest over his position and secure an orderly handover to Gordon Brown.
However, direct talks between the two men over a party conference announcement are not thought to have begun, despite reports that Mr Blair has decided to reach an agreement with the Chancellor over the handover before Labour's rank and file gather in Manchester.
Mr Blair has already faced pressure from his critics to use the annual conference to stand down, amid growing rumours at Westminster that he intends to vacate No 10 next year, possibly after the tenth anniversary of his premiership in May.
Margaret Beckett, the Foreign Secretary, fuelled talk of the succession last night, calling on Mr Blair and Mr Brown to orchestrate a smooth transition.
In an interview with The Times Ms Beckett said it was up to the two men to decide whether the party conference was the right time to signal the transition to a Brown premiership.
She told the paper: "What people want is for there to be a process which there can easily be which is supportive of the party and not the other way round."
Mr Blair yesterday urged Labour to "hold its nerve" after Charles Clarke sparked a fresh bout of speculation about Mr Blair's future when he questioned the Prime Minister's ability to remain in Downing Street and attacked John Reid, his successor as Home Secretary.
The rift between Mr Clarke and the Prime Minister deepened when allies of the former home secretary revealed that he resisted pressure from Mr Blair to adopt populist policies such as an American-style "Megan's law" allowing people to know when paedophiles live in their area. Mr Reid is now considering the idea despite warnings that it could drive child molesters underground.
Allies said Mr Clarke also opposed Mr Blair's plan to allow the detention without charge of suspected terrorists for 90 days, a proposal on which the Government suffered a crushing defeat when MPs limited it to 28 days. " He tried to bring the party with him, and sought a consensus but Downing Street kept pushing for quick headlines," said one friend.
In a round of media interviews, Mr Clarke said Mr Blair had lost his " sense of purpose and direction", doubted that he could recover his authority but hoped he could still do so and stopped short of saying he should stand down.
The Prime Minister dismissed Tory claims that Mr Clarke's broadside amounted to his "Geoffrey Howe moment" the devastating assault on Margaret Thatcher when her Deputy Prime Minister resigned, paving the way for her downfall in 1990. Blair aides said Mr Clarke had the right to " let off steam" after being sacked over the foreign prisoners fiasco last month.
Mr Blair said: "I have a very great regard for Charles, both for what he did in government and afterwards. I simply felt he had to move from his position for the reasons I gave at the time. We are a year from a general election. We have got three years, if not more, before the next general election. What we should do is calm down, hold our nerve and get on with governing.
To avoid a war of words, Mr Reid declined to respond to Mr Clarke's criticism over four of his decisions describing the Home Office as "not fit for purpose"; considering a "Megan's law"; protesting about a judge's sentence for a paedophile and delaying plans for police forces to merge.
Downing Street backed Mr Reid's judgement about the performance of the Home Office, saying the Prime Minister believed it needed "radical transformation". Mr Blair's official spokesman said: "Charles Clarke's personal disappointment was perfectly obvious on the day he left the Government and, given the circumstances, understandable, but an expression of that disappointment should not be a surprise."
But Mr Clarke's doubts about whether Mr Blair could recover his authority reignited the debate about how long he should remain. Frank Dobson, the former health secretary, said Mr Blair had become an "electoral liability" who was damaging Labour's prospects.
Although Mr Clarke said that he expected to back Gordon Brown as Mr Blair's successor, left-wing Labour MPs hope he might stand against him. " Clarke has to stand for the leadership," said one leading left-winger. "It would offer the party a choice between tomorrow's man and Cold War Gordon."
David Davis, the shadow Home Secretary, described Mr Clarke's comments as "a Blairite equivalent, a media-based equivalent, of what Geoffrey Howe did to Margaret Thatcher".
Sir Menzies Campbell, the Liberal Democrat leader, said: "This is no longer merely a question of the interests of the Labour Party, but the interests of the country.Reuse content