Ministers have accused Harriet Harman, the deputy Labour leader, of already plotting how to succeed Gordon Brown if the party loses the next general election.
With the latest polls showing the Tories opening up a 20-point lead over Labour, fellow ministers believe Ms Harman is deliberately distancing herself from the Prime Minister and trying to appeal to party members at the expense of the Government.
Last week Ms Harman launched an outspoken attack in a cabinet meeting on the culture of greed in the City, calling for a retrospective clawback of the bonuses paid to executives in banks bailed out by the taxpayer.
Her comments, which rapidly became public, put her at odds with colleagues who argued that bankers’ contracts could not be torn up and that such action would wreck Labour’s reputation for being business-friendly. It also went far beyond Mr Brown’s preference for a clamp down on future bonuses rather than those that have already been paid.
One minister said last night: “She is trying to appeal to the party, rather than the country” and added that she should be “reined in”.
Ms Harman has also championed moves to require public sector bodies, such as schools and councils, to take social class into account in the allocation of money, services and jobs.
To the irritation of colleagues, she signalled her support for proposed anti-discrimination legislation to “embed” considerations of social class, alongside sex and ethnicity, in the decisions of civil servants. Such moves are popular – particularly with the Labour left – but put her at odds with Mr Brown and official government policy.
Fellow ministers suspect that she is trying to position herself for a future leadership contest by spearheading such criticisms. They are particularly angry that she appears to be distancing herself from the PM at a time when cabinet unity is under pressure, claiming that his tacit support for her deputy leadership campaign helped clinch her victory.
The accusations were strongly denied last night by a spokeswoman for Ms Harman, who insisted that her loyalty to the Prime Minister was not in doubt, saying: “She is a very loyal deputy. She always has been and she always will be.”
But as tensions ran high yesterday, Labour figures suggested she could have been the source of a claim in The Guardian that Mr Brown was being touted by the German Chancellor, Angela Merkel, for a new job as a global financial watchdog.
The author of the report – dismissed by Downing Street sources as “complete fantasy” – was Jackie Ashley, who is known to be close to Ms Harman. However, the suggestion that Ms Harman was behind the report was dismissed as nonsense last night by a spokeswoman for the Labour deputy leader. But one frontbench colleague said: “Harriet is being pumped up by a small clique of admirers. She isn’t exactly discouraging it and it’s not helpful.”
In a reference to Mr Brown’s discreet support for her in the deputy leadership contest, he added: “She should remember how she got her job and who voted for her.”
MPs believe Ms Harman is bound to stand in a future leadership contest, if only to ensure a woman’s name is on the ballot paper. She has told allies that she was playing a “long game” and that the party needed articulate women in its higher echelons. Close supporters told her, after she got the better of a Prime Minister’s Question Time clash with William Hague last year, that she had the fighting spirit and popular appeal to succeed Mr Brown.
Ms Harman, who is also Labour chair, the Leader of the House of Commons and minister for Women and Equality, has also attacked sexism in the City. She has set up a review of pay in the finance sector, arguing it discriminates against women, and criticised the widespread use of lap-dancing clubs to entertain clients.
The consensus at Westminster is that she has little chance of victory, with one party source insisting yesterday: “The idea that she would ever be elected leader is laughable.”
She was similarly written off in the deputy leadership election 18 months ago, but narrowly saw off Alan Johnson to win the post in the fourth round of counting. Her high-profile post chairing the party and her appeal to Labour’s grassroots guarantees a strong vote even if she does not clinch the top job.
An Ipsos MORI poll for Sky News yesterday gave the Tories a 20-point lead over Labour, suggesting that the “Brown bounce” had fizzled out. It put the Conservatives on 48 per cent (up four points), Labour on 28 per cent (down two) and the Liberal Democrats on 17 per cent (unchanged). If replicated at a general election the figures would put David Cameron in Downing Street with an overwhelming majority of more than 200.
The haemorrhage of support for Labour since the beginning of the year sets the scene for a grim night for the party on 4 June, when European and local council elections take place.
There are growing fears in Labour headquarters that it could finish third behind the Liberal Democrats, triggering a fresh round of speculation over whether Mr Brown should be replaced before the election, which is due in 2010.
Party people: The other contenders
Ed Balls Schools Secretary
Remains one of Gordon Brown’s closest confidants and likely to be his choice for leader. Would attempt to appeal to the soft left and would cite his economics background as a key qualification. Led the Government’s robust response to the Baby P scandal.
Jon Cruddas MP for Dagenham
Won plaudits for his deputy leadership campaign 18 months ago and has steadfastly refused to join the Brown administration. Admired by the party’s grassroots for campaigns for more social housing and higher taxes for the best-off. His blunt style could turn off Middle England.
Alan Johnson Health Secretary
Preferred choice of many Labour MPs, who believe his down-to-earth style would produce a useful contrast to David Cameron. But his age – he will be 60 if the election is in 2010 – could mean he is only a short-term damage-limitation candidate.
David Miliband Foreign Secretary
Six months ago he was the clear front-runner, but he had a disastrous party conference and was slapped down as a “novice” by the PM. Almost certain to stand in the next contest, representing himself as a generational change and able to reach to all sections of the party.
Ed Miliband Climate Change Secretary
Fast coming up on the rails, highly ambitious beneath the affable exterior. He was urged to resign over the controversial plans to expand Heathrow airport – which would then have given him “distance” from a Labour loss at the next general election.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies