Prescott lets slip that Blair could announce departure in September

Tony Blair could announce his departure date from Downing Street in just two months' time at Labour's annual conference, John Prescott has signalled.

The Deputy Prime Minister reignited speculation that a handover of power could be imminent as he suggested that the countdown to leadership elections could begin "very shortly".

The Prime Minister said last week he wanted to stay in office for at least another year, indicating he would not relinquish the leadership until the autumn of 2007. But Mr Prescott hinted that a more rapid transition was being secretly considered when he disclosed that a timetable leading to elections for Labour's top two posts could soon be presented to party members.

Mounting a strong defence of his own performance as Deputy Prime Minister, he said: "I believe . . . I can still make an important contribution. The party has its means of making decisions about that and I think that will come very shortly."

Mr Prescott told BBC1's Sunday AM that he favoured a contest for the leadership, although he stressed he hoped Gordon Brown would take over as leader. He said: "No one is on a par with him."

He said he wanted to see "sufficient time for people to get into the job" and said that would be guaranteed by a "timetable to be decided by Tony and the party".

His comments suggest Mr Blair could spell out his intentions over his future when he addressed the Labour conference in Manchester on 26 September. The Prime Minister has said he will stand down before the next election, but has refused to name a date.

He told journalists at last week's G8 summit in St Petersburg that he would attend the annual gathering of world leaders next year and Alastair Campbell, his former communications director, has been quoted as saying he will resign in "a year and a bit".

Opinion is divided among senior Downing Street advisers over when Mr Blair should bow out, with some "ultra-Blairites" insisting he should not address the subject yet. The Prime Minister, who goes on his summer break in a week's time, could make a final decision while on holiday. When he does decide to step down, Mr Prescott, who has endured a torrid three months' publicity, looks certain to resign with him.

The Deputy Prime Minister's office mounted a damage limitation exercise over his apparently unguarded comments.

"People should not read anything into this. John Prescott is not saying anything new and the position remains exactly as the Prime Minister has set out," it said in a statement.

Mr Prescott was in combative mood yesterday, although he admitted some Labour members were "disappointed" with him over his affair with his diary secretary, Tracey Temple.

"Of course, I'd be stupid not to recognise that. But what [party members] say [is] 'get on with the job, get on with doing what Labour's done and get that case across.'

"Now I still believe that I've got an important contribution to make in that, otherwise I wouldn't stay around. And I have, despite all the nonsense in the press. I do want to continue that programme."

He asked to be judged on his record as deputy Labour leader over the past 12 years, not on thepast 12 weeks.

He delivered a robust defence of his meetings with billionaire Philip Anschutz, whose firm has bought the Millennium Dome and is involved with a bid to develop a super-casino on the site.

He said they had not discussed the casino project, but added: "I would have been stupid to have refused to have talked to a man who was involved in part of a process that was bringing £5bn into that part of London."

'I wore cowboy outfit gift at Anschutz ranch'

John Prescott admitted he had put on the cowboy gear given to him by Philip Anschutz during his visit to the American billionaire's ranch.

The Wild West outfit - valued at £609 - included a white Stetson hat, calf-length leather cowboy boots with spurs and a silver belt buckle with the initials JP.

Mr Prescott received the gifts when he and two aides stayed at the 32,000-acre ranch owned by Mr Anschutz last July. He said: "I wore them - I wore them on the day because I went round the ranch, looking at how a ranch works in that sense.

"I looked at a farm that's dealing with sugar beet where there's a great deal of problem ... it's the working gear."

The Deputy Prime Minister has previously said he was keen to see the ranch because of a love of westerns. He said yesterday his gifts were "properly recorded" although he received varying advice from civil servants.