Gordon Brown almost resigned as Chancellor when he was photographed with documents revealing market-sensitive figures ahead of the 2005 Budget, his former spin-doctor claimed today.
Damian McBride said he managed to stop them being published - and potentially saved his boss's job - by falsely suggesting they were calculations about the Tory opposition's economic plans.
Mr McBride's disclosure came in his memoirs detailing years of using the black arts of media manipulation, briefing against ministers and leaking sensitive documents in his determination to bolster Mr Brown's position.
His book Power Trip, which was published today, has proved an unwelcome distraction for leading Labour figures dogged by questions at their party's conference about in-fighting in the last government.
Mr McBride recalled that Mr Brown “screwed up in a way that almost cost him his job” on the eve of his Budget in March 2005.
He was alerted to the mistake when a newspaper reporter emailed a photograph of Mr Brown in Downing Street holding papers that included a set of numbers in black marker pen. The journalist asked whether they were Budget-related and suggested one row could be the borrowing figures about to be announced by Mr Brown.
Mr McBride writes: “With false bravado, I told him I sincerely doubted it, but I'd ring back once I'd looked, then waited with a knot in my stomach at the printer for the photo to emerge. I could have been sick when I saw it.
”There were the borrowing figures, the growth forecasts, net debt, unemployment … Every key market-sensitive number in the Budget.“
Mr McBride said he interrupted a meeting at which Mr Brown was rehearsing his Budget speech with Ed Miliband and Ed Balls and others to show them the picture.
”The only sound in the room was gulping. Gordon looked up and said quietly: 'I'm going to have to resign. Hugh Dalton did nothing compared to this', a reference to the Labour Chancellor who'd been forced to quit for telling a journalist a minor but market-sensitive secret on his way to deliver the 1947 Budget.
“'I'm serious, I'm going to have to resign,' Gordon said, with genuine shock and distress, before coming back to his normal self and remembering there might be someone else to blame. 'Blair!' he roared. 'Blair made me give him the figures. Why did I ever agree? Why has he done this to me?”
A Treasury official who was hurriedly summoned said they were not the “exact borrowing figures” about to be published, but were “pretty bloody close”.
Mr McBride said Mr Balls then told him: “Well, it's your call.”
“There was no instruction to mislead the paper; I'd been given the facts, now it was up to me to decide how to use them. I called the reporter back and did my finest lying-without-lying.”
Mr McBride said had checked and could confirm they were not the borrowing figures. He speculated they could be the latest calculations of “the Tory black hole on public spending” and suggested the paper ran a story suggesting the opposition's figures did not add up.
“I knew that mentioning the mythical Tory black hole was the single easiest way to make a journalist's heart sink, but it was entirely plausible that Gordon would have obsessively worked it out…Plus, the fact I was actively encouraging him to use the photo would have allayed any suspicion it was a problem for us.”
After the reporter told him the picture would not be used, he passed on the news and got “a thumbs-ups and cheers from everyone except Gordon, who just looked back down at his speech and said gruffly: 'Where were we?'”
Mr McBride said: “He'd gone from having to resign 30 minutes previously to acting as though I'd caused an unnecessary interruption.”