Leaked memo's stark warning to Labour

Tony Blair's government is seen as a "shambles", and Gordon Brown's position is "eroding", a Downing Street memo has warned.

The unnamed writer of the leaked document warned that the public is taking a long-term view that Labour's time is up. He or she added that this is really "shit or bust" time for the Government.

Downing Street did not contest the authenticity of the memo yesterday, which was leaked to The Mail on Sunday, but stressed that it was not written by anyone employed by Tony Blair. It is suspected to be the work of an outside adviser. John Prescott told BBC1's Sunday AM that he did not know the source, adding: "I can't be sure that it might not be a teenybopper on the side giving some kind of information and advice."

Labour figures fear that the camps around Tony Blair and Gordon Brown are leaking information in an attempt to undermine one another.

The memo also warned against forcing an "unpopular" leader on the party. It referred to the Conservatives being six points ahead in opinion polls, suggesting it was written in early October, or the summer.