Brown says he is happy to stay as Chancellor

Gordon Brown insisted yesterday that he was happy to remain as Chancellor as he sought to play down differences between him and Tony Blair.

Gordon Brown insisted yesterday that he was happy to remain as Chancellor as he sought to play down differences between him and Tony Blair.

But allies of the Prime Minister admitted that the relationship between the two men was strained because the Brown camp had believed that Mr Blair was ready to stand down this summer. One said: "There is a price to pay in terms of relations [with Mr Brown]. But he is very determined to go on and feels he has the momentum to do so."

In a round of interviews about the three-year spending blueprint he unveiled on Monday, Mr Brown was questioned about reports that the relationship had sunk to an all-time low following Mr Blair's decision to lead the party into the next general election.

"It's the job we do that we'll be judged by, not the positions we hold," he told GMTV. "Tony Blair and I laugh when we read these stories. I think over the weekend I talked to him about half a dozen times about the spending review and about other issues in the Government. We talk all the time, we've got to get on with the business of government despite these press headlines and we do, and I will continue to do that."

On BBC Radio 4, the Chancellor hinted that he would not welcome a move to the Foreign Office - a proposal urged on the Prime Minister by Blairite ministers who resent Mr Brown's control over domestic policy. Despite the rift, Mr Blair is thought unlikely to move him from the Treasury.