The fragile truce between Tony Blair and Gordon Brown was shattered when Cherie Blair appeared to brand the Chancellor a liar.
A carefully crafted speech by Mr Brown to the Labour conference, designed to draw a line under recent tensions between him and the Prime Minister, was overshadowed by Mrs Blair's attack as she watched the speech on a television monitor just outside the main hall.
Carolin Lotter, a TV producer with the American news agency Bloomberg, said she heard the Prime Minister's wife say "Well, that's a lie" after Mr Brown told delegates: "It has been a privilege for me to work with and for the most successful ever Labour leader and Prime Minister."
Downing Street dismissed the story as "totally untrue" while Mrs Blair told reporters: "Honestly, guys, I hate to spoil your story, but I didn't say it and I don't believe it either."
But the damage had been done. It no secret that she dislikes Mr Brown and does not want him to succeed her husband. Her hostility will have increased after allegations that Brown supporters attempted a coup against the Prime Minister earlier this month.
Bloomberg stuck to its guns, saying: "We stand by our reporting. The story speaks for itself." Ms Lotter said she was standing no more than "one or two metres" from Mrs Blair.
The Brown camp was exasperated that a "unifying speech" on which the Chancellor had worked for months was scuppered by the controversy. The Cabinet agreed last week to stick to "policies not personalities" at the Manchester conference in an attempt to keep the lid on the simmering tensions at the top of the party.
They were again exposed by the alleged remark, which will also undermine Mr Brown's drive to project a more favourable image to the public after his personal ratings have fallen.
There were further signs that Blairites may put up a candidate against Mr Brown if they doubt he could beat David Cameron at the next general election. Brown allies fear the Chancellor is being set up for a fall by attacks on his character from Labour's ranks, designed to allow a rival candidate to emerge amid fears that the party would lose power under Mr Brown.
Only minutes after Mr Blair applauded Mr Brown's address and shook hands with him warmly, the Bloomberg agency claimed Mrs Blair had reacted furiously to the speech as she toured an exhibition hall at the conference centre.
Ironically, Mr Brown had heaped praise on Mr Blair in his speech - and admitted frankly that there had been differences between them during their 23-year political partnership. "It's hardly surprising that as in any relationship there have been times when we have differed," he said. "And where over these years differences have distracted from what matters, I regret that, as I know Tony does too."
Charles Clarke, former home secretary, also appeared to renew his feud with Gordon Brown. He told a fringe meeting, held by The Independent, that he did not regret outspoken interviews earlier this month in which he questioned the Chancellor's fitness to be leader.
"They accurately reflected my views, I think that week was a very serious week for politics and what motivated me was to address that question as directly as possible."
In a further blow to Mr Blair, dozens of Labour MPs signed an open letter to the party chairman calling for a debate at the conference on the future of the Trident nuclear weapons system. Forty MPs signed the letter to Hazel Blears, after a decision by organisers of the party conference to rule out of order a series of resolutions opposed to Trident.
Today Mr Blair will issue a "don't turn back" message to his party as he addresses its annual conference for the 13th and last time before standing down. He is expected to adopt a conciliatory tone towards Mr Brown, although that section of his speech was still being finalised late last night.
He will call on Labour to rebuild the coalition of support which swept him to power in 1997 by pressing ahead with a new raft of reforms. He will say: "The core vote of this party is not the heartlands, the inner city or any sectional interest or lobby. Our core vote is the country."
Mr Blair believes that to win a second decade in office, the party needs to be "more New Labour, not less". He will tell the conference: "The scale of the challenges in 2007 dwarfs what we faced in 1997. They are different, deeper and bigger."
He will say: "New Labour delivered because we defied conventional political wisdom and so changed. Aspiration and compassion reconciled. Economic efficiency and social justice seen not as sworn enemies but as natural friends, partners in progress. This defined New Labour."
Indiscretions of a prime minister's spouse
June 2002 Cherie Blair apologises for any offence caused by remarks she made about Palestinian suicide bombers. "As long as young people feel they have got no hope but to blow themselves up, you are never going to make progress," she said, hours after 19 Israelis died in a suicide bomb attack on a bus in Jerusalem.
December 2002 Mrs Blair apologises for the "Cheriegate" property deal, in which she bought two flats in Bristol with the help of the convicted fraudster Peter Foster. "I had no idea he had been in jail in more than one country, including this country," she said. In a tearful statement, she blamed her "misfortune" on the pressures of running a family while holding down a job.
October 2004 Mrs Blair attacks President George Bush's human rights record over Guantanamo Bay and condemns the arrest of a gay couple for defying the ban on gay sex. Her comments ignored the tradition that British political figures, and those close to them, should not criticise other countries during visits.
February 2005 Mrs Blair says of Britain's Olympic prospects: "We are going to win the bid. Paris? What does Paris know about culture?" Her joke defied an IOC demand that contestant cities adopt "fair play" rules.
September 2005 Mrs Blair asks the wheelchair-bound comedian Laurence Clark: "Are you a stand-up comedian or a sit-down comedian?" The comedian defended her, saying she had made a "crap joke" rather than a "mistake".
November 2005 "The truth is if I hadn't had the funding from the state to go to university I would have worked in a shop," Mrs Blair tells the barrister's magazine Counsel. Opposition MPs remind her that it was her husband who introduced tuition fees.
May 2006 Mrs Blair makes a joke about the Deputy Prime Minister John Prescott and the cabinet reshuffle. "The Cabinet is like an Ikea cabinet - one dodgy screw and it falls apart," she told Gordon Morrison, chairman of Clic Sargent Cancer Care, who repeated the joke at a speech at a London dinner.
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