Alan Milburn: 'Tony can join Attlee and Thatcher as the next PM who has embedded change in Britain'

All eyes are on Alan Milburn at this week's Labour Party conference in Brighton and he knows it. In the three weeks since Tony Blair appointed him the Government's policy chief and Labour's general election co-ordinator, the arch-Blairite former health secretary has kept an uncharacteristically low profile. That is no longer an option.

All eyes are on Alan Milburn at this week's Labour Party conference in Brighton and he knows it. In the three weeks since Tony Blair appointed him the Government's policy chief and Labour's general election co-ordinator, the arch-Blairite former health secretary has kept an uncharacteristically low profile. That is no longer an option.

The Government's tectonic plates moved in the reshuffle, but not in the way Gordon Brown was expecting: instead of taking over as Prime Minister, he found that a rejuvenated Mr Blair had not only decided to carry on but had apparently handed the Chancellor's pivotal election role to Mr Milburn. Although the Blairites deny it, the Brownites saw the move as the Prime Minister anointing Mr Milburn his chosen successor.

Mr Milburn, in his first newspaper interview since his surprise recall to the Cabinet, goes out of his way to praise Mr Brown's record as Chancellor and insists he will still play a key role in the election. But, given past tensions with Mr Brown, he is walking on eggshells. Diplomatically, Mr Milburn has scrapped plans to address the Brighton conference, anxious not to tread on the toes of cabinet colleagues and give the media the opportunity to rerun the reshuffle story. He does not want to be seen as a splitter.

Cabinet colleagues view him as the new power in the land. He is based in the Cabinet Office but has an office round the corner and up four steps from Mr Blair's Downing Street "den", and another perch at Labour Party headquarters. There is no doubt he carries the Prime Minister's authority. Ministers see him as replacing the departed advisers Alastair Campbell and Peter Mandelson. "Instead of telling people to 'Ask Alastair', Tony now says 'Ask Alan'," one cabinet member has said.

Mr Milburn insists his fellow ministers have been "brilliant" and "incredibly co-operative" about his new role; he held "positive meetings" with most of them last week to discuss their policy agenda and their party conference speeches. He also had several telephone calls with Mr Brown, who was in Scotland with his dying mother.

The Chancellor, rather scathingly, refers to his rival as plain "Milburn", but the man himself is anxious to rebuild bridges with "Gordon". "We have got a very cordial relationship," Mr Milburn says. "We are both determined that we are doing to work together."

Did he sense that Mr Brown resented his appointment? "No, certainly not in the discussions we have had." He dismisses as "balderdash" reports that Brown allies have been excluded from daily Downing Street meetings, insisting that the most important body is Labour's election strategy group, chaired by Mr Blair and including the Chancellor.

"Gordon is a huge figure in the party, the movement, the country. He has a huge contribution to make. I want to work closely with him, John Prescott and all the others in the Cabinet."

Would he support Mr Brown as Mr Blair's successor then? Mr Milburn laughs off the question without answering it.

He says: " It is not about me, Gordon, Tony or John Prescott. It's about all of us. It genuinely is a team game. It works only if you have one team. That is what I am determined to achieve. There is a shared determination to deliver the third term Labour has never had."

Why did Mr Milburn abandon his much-publicised decision to spend more time with his family after less than 15 months? "It wasn't what I intended. It was not part of any game plan. In some ways, it went against my better judgement to come back. Tony was pretty persuasive.

"If I had been offered a mainstream departmental job, I would have been clear that was not what I wanted. But the job of co-ordinating policy across government desperately needs doing, and we have to get into the right shape for the election. So it was difficult to say no."

His "quality of life" outside the Government was much better. He admits Mr Blair had "a conversation" with his partner Ruth Briel, a part-time NHS psychiatrist, to persuade her to support his return. "Ruth has been a member of the Labour Party longer than I have; she understands there is a job to be done and has been hugely supportive."

What about his sons Joe, 13, and Danny, aged seven? "They prefer me to be at home," he says. "I have got pretty good at the trampoline." Will they demand him back after the election? "They will have a view, I suspect; they are kids with strong views." He struggled to explain his official title of Chancellor of the Duchy of Lancaster to them. They were baffled that he is held responsible for some of the Queen's estates.

Mr Milburn's appointment was the clearest signal that Mr Blair wants a "radical" election manifesto with a raft of new policies rather than a "safety first" one said to be favoured by Mr Brown. Mr Milburn says Labour will need "a different campaign" to 1997 and 2001 but praises the two Brown-led campaigns as right for the time. Tensions are not far beneath the surface. Mr Milburn says: "It's no use shouting louder and louder about past achievements. Elections are fought on the basis of the future versus the past. What we have got to do is produce policies that connect with people's daily lives."

He wants a gear change from structural reforms to bread-and-butter policies. "We have done a lot of structural reform but it is a means to an end, not an end in itself. Sometimes we have fallen into the trap of using the arcane language of reform. People are not interested in structures but outcomes."

He finds a silver lining in Labour's private polls showing that three million natural supporters have deserted the party. "People have not moved away from the values of the Labour Government. What they want to know is that we have not walked away from them. They want New Labour back, they want the Prime Minister back and focused on the issues that matter to them. The conference is the start of this process, not the end of it."

He accepts, however, that Iraq may cast a shadow over plans to use the conference as a showcase for new policies. "The events in Iraq, the seizing of Ken Bigley are excruciating. It is unimaginable. Your heart goes out to his family."

Will Mr Blair be blamed for the hostage crisis? "I don't think that is the mood in the country. It is deep, deep anger about what these people are doing to this poor family. They deeply resent this game of cat and mouse being played out."

He challenges the view that Iraq was "Tony's war" and accepts his share of responsibility. "It is far better to have Saddam Hussein in prison than in power. But we have to acknowledge that the decision has divided the country. We can't go back. Most people would say we have to see it through and build a better Iraq.The idea that you could wish Iraq away is a joke. You have to provide an explanation for decisions we collectively took."

Mr Milburn believes the divisions caused by Iraq can be healed by Labour building a "progressive coalition" for what he calls "one-nation politics", a phrase normally associated with the Tories. Labour will try to woo critics of the war with policies that are "radical in means and progressive on ends".

His mission is to reassemble the coalition that propelled Labour to power in 1997. "Before then, in politics you had to choose between social justice and economic efficiency. New Labour has shown that you can have the two together. We used to have to choose between helping working-class people and pandering to middle-class aspirations. New Labour has shown you can do both.

"The acid test for any government is whether the changes you make are deep and lasting. The truth is that Mrs Thatcher's changes - whether we liked them or not - were lasting and enduring." The goal is to embed Labour's values in the same way. "Tony can join Attlee and Thatcher as the next Prime Minister who has embedded change in this country. We are on the way to doing it but we have not quite achieved it and that is why we need a third term."

Mr Milburn insists he does not have a back-of-envelope career plan, like Michael Heseltine. He has made "no decision" on whether to remain in the Cabinet after the election.

Some ministers believe that his new job may harm his long-term prospects, especially if Labour's majority is cut sharply and he becomes associated with the dog days of the Blair era. "It's not about me," he says. "If it was purely about me, I wouldn't have done it. I'm not saying it's a huge sacrifice; the motivation is to do a job for the Government, Tony and the party."

Although widely viewed as the most likely "stop Brown" candidate in a future Labour leadership race, Mr Milburn hints that he may not have the appetite for being prime minister. "There is pressure in this [job] but you ain't seen nothing yet ... There is a huge difference. His [Mr Blair's] strength and ability to absorb it is phenomenal." But Mr Milburn has a maxim: "Never say never."

THE CV

Born 27 January 1958

Educated John Marlay School, Newcastle; Stockesley Comprehensive School; Lancaster University; Newcastle University

Career * Co-ordinator, Trade Union Studies Information Unit, Newcastle, 1984-90

* Senior business development officer, North Tyneside Council, 1990-92

* MP for Darlington since 1992; opposition spokesman on health (1995-96) and Treasury (1996-97)

* Minister of State, Department of Health, 1997-98

* Chief Secretary to the Treasury 1998-99

* Secretary of State for Health 1999-2003; resigned from Cabinet, June 2003

* Chancellor of the Duchy of Lancaster, September 2004-