Revealed: Labour `dirty tricks' to undermine the Lib Dems

THE LABOUR Party has secretly set up a special "dirty tricks" unit to combat the Liberal Democrats, despite the agreement signed by Tony Blair and Paddy Ashdown for closer co-operation between the two parties.

The Labour move, revealed in an internal document leaked to The Independent, triggered Liberal Democrat accusations last night of "hypocrisy" by Mr Blair, who pledged to end the "destructive tribalism" of British politics when he announced his new deal with Mr Ashdown this week.

On Tuesday, as the two leaders finalised their joint statement, a memorandum was sent out by Labour's Millbank headquarters in London. Announcing the "new project", it urged party officials throughout the country to monitor the Liberal Democrats' activities so Labour could "nail their lies and hypocrisy wherever they occur".

Amid fears of heavy Labour losses in next May's local elections, Labour HQ asked local officials to collate any Liberal Democrat propaganda, press coverage or "inside information". The memo said it would be stored on the controversial Excalibur computer database.

The secret Labour operation has heightened fears among Liberal Democrat activists that Mr Blair is determined to neuter their party, despite his calls for an anti-Tory alliance "to ensure the ascendancy of progressive politics".

The disclosure also fuelled a grassroots rebellion against Mr Ashdown, who is already under fire for not consulting the party about his deal with the Prime Minister to widen the remit of the cabinet committee on which senior Liberal Democrats discuss constitutional reform.

The Liberal Democrat leader will face strong criticism on Monday when he appeals to the party's ruling federal executive to back his agreement with Labour. Some activists are so furious that they plan to demand a special party conference in the hope it will scupper the deal. Such a humiliating defeat for his strategy could persuade Mr Ashdown to resign as party leader.

Norman Baker, the Liberal Democrat MP for Lewes, said the timing of the Labour operation against his party was curious. "It does seem at odds with the Prime Minister's professed views."

Peter Moore, Liberal Democrat leader on Sheffield City Council, which the party hopes to gain from Labour in May, said: "On the one hand, Mr Blair talks about getting rid of tribal politics. At the same time, his organisation is sharpening its war axes and arrows. What is more tribal than that?"

Labour sources denied the move was at odds with the Blair-Ashdown pact. One official said: "This is about stopping the Lib Dems saying one thing in one part of the country and another thing somewhere else. All we are doing is collating information."

Labour was much more positive about the deal, while anxious Liberal Democrat leaders sought to reassure their dissidents by playing down its scope.

Mr Blair said he was setting "no limits" to the closer links with the Liberal Democrats. "I have always believed that where politicians can agree, it is sensible for them to work together. I am not a tribalist in politics." But he made clear the Liberal Democrats would not be able to push the Government into early entry into the single European currency.

In the Commons, left-wing Labour MPs expressed their doubts about the new deal. Tony Benn said the voters had elected a Labour government, not a Lib-Lab one. "The relations between two political parties in this House are not a private matter between two leaders, but concern the relationship between the legislature and the executive." Dennis Skinner attacked "tin- pot arrangements with these rag-tag and bobtails". And he added: "They are totally unreliable. As soon as we get rid of this barmy idea the better."

Jack Cunningham, Mr Blair's cabinet "enforcer", and Alan Beith, the Liberal Democrat deputy leader, held their first meeting to review the workings of the joint cabinet committee yesterday. Dr Cunningham said: "We hope to identify issues to broaden the agenda of discussion and look at ways we can work together in the interests of the country. We agreed to consider how we might strengthen the process."