Brown to set out his priorities for No 10 as rivals bow to inevitable

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Gordon Brown will outline his plans for tackling terrorism and the alienation felt by many young Muslims as he sets out his priorities for power after Tony Blair steps down.

Potential rivals closed ranks behind the Chancellor yesterday after he called for a fresh drive to protect the environment, to improve housing and child care and to respond to the fast emerging economies of China and India.

Although Mr Brown denied suggestions that he was now acting as joint prime minister, he has begun an intensive campaign to sketch out his personal manifesto for government.

His blueprint for fighting terrorism will be followed within weeks by a speech setting out his proposals for controlling global warming.

Growing numbers of Ministers now expect Mr Blair to announce his resignation next year to give Mr Brown at least 18 months leading the government before the next general election.

Although the Chancellor's credibility took a battering in last week's shock by-election defeat for Labour in Dunfermline and West Fife, he remains the overwhelming favourite to succeed to Downing Street.

The Local Government Minister, David Miliband, once tipped as a dark horse challenger to the Chancellor, described Mr Brown as a leader-in-waiting.

"The question of anointment or otherwise may be up for grabs," he told ITV1's Jonathan Dimbleby programme. "But Gordon has been an outstanding Chancellor of the Exchequer, an outstanding leader of our party supporting Tony Blair over the last 10, 12 years.

"I can't think of anyone who's better prepared, or better qualified, to lead the country."

Charles Clarke, the Home Secretary, made clear he had reached an understanding with Mr Brown, with whom he has had an occasionally strained relationship in the past. Asked if Mr Blair and the Chancellor were, in effect, running a dual premiership, he told The Observer: "That's what Tony would always want, what Gordon should do.

"To be a great, great leader, that requires [Gordon] to lead. He has to come out and make the speeches, make the arguments."

However, Mr Clarke acknowledged that rebel left-wing MPs would almost certainly field a candidate for the leadership.

The Chancellor will call for tougher anti-terror laws, increases in the security budget and the creation of a "Bletchley Park" style group of experts to monitor terrorist networks, in his speech today to the Royal United Services Institute in London.

He will also make clear his sympathy for suggestions that responsibility for responding to terrorism should be taken from the Home Office and handed to a US-style Department for Homeland Security.

"At no point should any serious decision-maker be soft on security matters and refuse to acknowledge the new world we are in. Instead we must be tough-minded, long-termist and solid in our resolution," he will say.

Mr Brown will also support a fresh drive to draw young Muslims into the political mainstream and to tackle the inequalities faced by ethnic minorities.

Mr Brown will propose the creation of an annual Veteran's Day ceremony in every British town and city to honour all servicemen and women.

The Chancellor said he was touring the country to listen to the wider concerns of the public.