Brown's allies launch counter-attack in support of embattled Chancellor

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Gordon Brown was under fire on three fronts yesterday - from the Tories to explain his role in the Bernie Ecclestone affair and from Labour colleagues to make concessions over fuel prices and pensions.

Gordon Brown was under fire on three fronts yesterday - from the Tories to explain his role in the Bernie Ecclestone affair and from Labour colleagues to make concessions over fuel prices and pensions.

Friends admitted the Chancellor was in the middle of the storm engulfing the Government but insisted he would not be "distracted" by them. Mr Brown kept a low media profile during a long-planned visit to Malta to attend a meeting of Commonwealth finance ministers on Third World debt.

The Tories accused him of "running scared" and refusing media interviews to avoid answering questions about allegations in a new book that he lied about his knowledge of the £1m gift to Labour by the Formula One boss, Mr Ecclestone.

In London Mr Brown's allies rounded on the author Andrew Rawnsley, claiming there were at least three serious inaccuracies in his book Servants of the People.

Aides said Mr Brown had not tried to sack Sir Eddie George as Governor of the Bank of England, did not threaten to resign as Chancellor after Peter Mandelson made a pro-single currency speech earlier this year, and nor did he keep Mr Blair in the dark before announcing the Government's policy on the euro in 1997.

Mr Brown's allies also dismissed Rawnsley's account of the Chancellor's role in the Ecclestone controversy. They accused him of quoting selectively from a radio interview in which Mr Brown appeared to deny knowledge of the Ecclestone gift, saying he was speaking generally about Labour's list of donors. They also disputed the book's account of a furious Mr Brown returning to the Treasury and saying that he had lied. One member of the Brown camp said: "He didn't even go to the Treasury. He went straight to Euston to catch a train to Birmingham. To get something like this wrong shows the author is relying on second, third or fourth-hand gossip rather than someone who was there."

Aides insisted it was "business as usual" for Mr Brown, adding that taking the flak for unpopular decisions was "par for the course" for any chancellor. "He will carry on doing what is right for the long-term interests of Britain," said one ally. "He is not interested in his own status. To him, what matters is what the Government achieves and delivers."

There will, however, be no respite for Mr Brown over the next few days. Today he will chair a meeting at the Treasury of Labour's economic policy commission, which will discuss the sensitive issue of pensions. It will draw up a policy statement to be put to next week's Labour Party conference in Brighton, where trade unions and activists threaten to inflict a damaging defeat on the leadership by calling for the basic state pension to be raised in line with earnings rather than prices.

Although the Government is likely to offer some concessions to the vocal campaign led by Baroness Castle of Blackburn for higher pensions, Mr Brown is resisting pressure to restore the link with earnings, broken by Margaret Thatcher in 1980. Other ministers are pressing him to be more generous and say he miscalculated the mood of the nation by raising the basic pension by just 75p a week in April.

The row over pensions is mirrored by a debate within the Government over how to respond to the fuel protests. Again, an apparently stubborn Chancellor is refusing to bow to immense pressure and, according to his critics, making matters worse before making an inevitable climbdown.

Ministers close to Mr Blair want to see a freeze or cut in duties to benefit all motorists. Mr Brown, however, is keener to direct help to hauliers and farmers. He believes it would be wrong to allow his normal Budget-making to be hijacked by last week's direct action.

Mr Brown will fly to Prague tomorrow for a meeting of G7 finance ministers, returning to Britain to make his keynote economic speech to the Labour conference on Monday. He will seek to turn the storm over fuel taxes into a wider choice between the higher spending offered by Labour and spending cuts promised by the Tories.

But his visit to the conference will only be brief. He flies back to Prague after his speech for a meeting of the International Monetary Fund. The Tories are branding him "the runaway Chancellor", but despite the current outcry Mr Brown is convinced that this is a battle Labour will win.

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