The storm over the dirty tricks campaign to smear David Cameron and other senior Tories – exposed after the leak of an email from the Prime Minister's most trusted spin doctor, Damian McBride – was a savage blow to Mr Brown's efforts to regain the political initiative.
Mr McBride has resigned in disgrace but Government hopes that his departure would ease the pressure were dashed after a minister faced new questions over how much he knew about the plot.
Mr Cameron last night demanded a personal apology from Mr Brown over the scheme to slur him and the shadow Chancellor, George Osborne, as well as Mr Osborne's wife, Frances. A Tory source said: "This really shows the amount of sleaze at the heart of the Downing Street operation under Gordon Brown."
Mr McBride had proposed that false stories be posted on a new website suggesting the Tory leader had a sexually transmitted "embarrassing illness", that pictures existed of Mr Osborne in women's underwear and also a story concerning an unwarranted personal slur on Mrs Osborne.
He floated the idea of claiming that the Conservative MP Nadine Dorries had a fling with a married colleague – another story without substance – and of alleging that a Tory MP abused his position to promote his gay partner's business interests.
A spokeswoman for the Tory leader said: "David is absolutely furious and thinks that Gordon Brown should give an absolute guarantee that nothing like this will ever happen again."
Ms Dorries, who writes in The Independent today, is considering legal action against Mr McBride.
As Labour MPs also demanded an inquiry into who was involved in the scheme discussed in emails between Mr McBride and the Labour blogger and former spin doctor Derek Draper, party headquarters mounted a desperate attempt to limit damage.
They stressed Mr McBride had done the right thing by stepping down and distanced themselves from Mr Draper, portraying him as semi-detached from the party. They insisted that no one else was involved but Tory sources questioned the role of the Cabinet Office minister Tom Watson, who was named in passing in one email.
Last night Mr Watson strongly denied involvement in the discussions between Mr McBride and Mr Draper on setting up an "attack blog" called Red Rag that would have spread unfounded gossip about senior Tories.
Mr McBride sent the emails from his Downing Street email account to Mr Draper, who runs the LabourList website, in January and copied in Charlie Whelan, a previous spin doctor to Mr Brown and now a union press officer. He admitted the messages contained a "bit of poetic licence", but insisted the campaign would put the "fear of God" into the Tories.
Mr Draper responded: "Absolutely, totally brilliant, Damian. I'll think about timing and sort out the technology this week so we can go as soon as possible."
After the emails fell into the hands of the anti-Westminster blogger Paul Staines, Mr McBride resigned over the "juvenile and inappropriate" messages.
Mr Brown rushed out a strongly worded statement insisting there was "no place in politics for the dissemination or publication of material of this kind". He said the pair were right to decide not to publish the smears.
But his attachment to Mr McBride raises fresh questions about the Prime Minister's judgement.
Mr Watson said yesterday he knew nothing about the emails: "I do not in any way condone the content of the email conversation – indeed I regard it as completely inappropriate."
But Tory sources said Mr Watson's statement "begged more questions than it answers" and pointed out he did not deny knowing about the website.
Senior Labour figures expressed horror at the damage being done to the party. Charles Clarke, the former home secretary, told Radio 4's Westminster Hour: "I always think that apologies aren't really sufficient, it's a question of accountability and actions. I think that both Derek and Charlie Whelan should consider their positions."
Tom Harris, the former transport minister, said: "There is absolutely no point in anyone in the party trying to spin such an odious sequence of events, of trying to suggest that it's less serious than what the media are trying to make out. This is about standards of political activity ... which have fallen far, far below what is remotely acceptable, especially for someone working at the very heart of government."
John McDonnell, the Labour MP for Hayes and Harlington, called for an independent inquiry.
Alastair Campbell, who ran the No 10 spin operation for Tony Blair, said he "barely knew" Mr McBride, but on reading the emails, "I was struck not just by their unpleasantness but also by their incompetence".
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