Tony Blair and Gordon Brown have reached a secret pact guaranteeing the Chancellor's central role in a future Labour government until the handover of power when the Prime Minister steps down.
The deal was aimed at repairing the renewed damage to their strained relationship to get them through the general election. Mr Brown insisted on Mr Blair making a public declaration that he would remain chancellor following speculation that he would be moved or sacked. Mr Blair did it on Wednesday.
The pact emerged as Labour members opposed to Mr Blair's leadership - including former ministers - called for tactical voting to oust Blairite candidates in the election.
According to allies of the Prime Minister, the deal does not guarantee Mr Brown will take over from Mr Blair, and was intended to overcome strains caused by Mr Blair's replacement of Mr Brown by Alan Milburn as Labour's election co-ordinator. However, allies of Mr Brown regard it as an important insurance policy.
A senior ally of the two men has told The Independent: "They have reached an accommodation. They are sworn to secrecy about it, and are not supposed to talk about it."
He added: "There is no way Tony could chop Gordon's head off if he delivers a third term with his handling of the economy. It would be very difficult to move him."
Insiders say the new agreement between the Prime Minister and Chancellor is primarily about the detail of Labour's election campaign - including a heavy emphasis on the economy. The two men are believed to have agreed to "talk again" about the succession after the election on 5 May.
That could result in a deal under which Mr Blair endorses Mr Brown as his favoured successor, although there would be big hurdles to overcome. It would be difficult for Mr Blair to go public, because that would alienate ministers with leadership aspirations. Mr Brown would be reluctant to settle for a private promise after feeling Mr Blair reneged on a pledge to stand down last year, when he changed his mind about quitting before the election.
The deal goes further than the public pledge that Mr Brown would remain at the Treasury if Labour retains power. Mr Blair has told him that he can stay on as chancellor as long as he wishes.
The Prime Minister, who has said he will step down before the following election, is believed to have made it clear to Mr Brown that he expects him to take over but there is certain to be a challenge, with John Reid, Charles Clarke and Alan Milburn among possible runners.
Mr Blair accepts that Mr Brown is the overwhelming front-runner to succeed him but remains determined to serve about another three-and- half-years as prime minister. Supporters of Mr Brown hope for a more speedy transfer of power - possibly after the referendum on Europe planned for May or June next year.
Mr Blair and Mr Brown appeared together yesterday for the second day running to underline their close working relationship. It follows Mr Blair's effusive praise for his Chancellor on Wednesday.
The Labour campaign team plans several joint appearances by Mr Blair and Mr Brown on the same platform during the election to strengthen Labour's appeal to the voters. A senior Labour strategist said: "You will be seeing them together a lot during the election campaign." One reason for the Prime Minister's anxiety to bring Mr Brown into the centre of his campaign for a third term is that the Chancellor is proving far more popular with the voters than he is. Polling is showing that support for Mr Blair is sinking and Tory officials are reporting that Mr Brown is an electoral asset to Labour while Mr Blair is becoming a liability.
The growing antipathy towards Mr Blair inside his own party led yesterday to the Labour-supporting New Statesman calling for tactical voting to "give Blair a bloody nose".
The magazine identified 47 seats held by Blairites including four cabinet ministers - Mr Reid, Mr Clarke, Hilary Armstrong, the Chief Whip, and Tessa Jowell, the Culture Secretary. Others on the hit list "to vote out" include Harriet Harman, the Solicitor General, Adam Ingram, the Defence minister, and Hazel Blears, the Home Office minister.Reuse content