The British Transport Secretary, Mr John Prescott, yesterday issued a defiant "I'm in charge" policy statement in which he revealed his 10-year £80 billion vision for transport.
The Transport Minister, Lord Macdonald, will fine tune the programme's details and announce by mid-2000 a timetable for the 10-year programme.
But Mr Prescott himself, Lord Macdonald and Downing Street all denied any suggestion that the Deputy Prime Minister was no longer responsible for transport.
Downing Street said such claims were "froth, nonsense and garbage" while Mr Prescott added that he would be "shaping, guiding and seeing the policy through".
With Lord Macdonald beside him, Mr Prescott explained his programme in a speech at a transport conference in London.
He said he had the agreement of both the Prime Minister, Mr Blair, and the Chancellor of the Exchequer, Mr Gordon Brown, that an ambitious long-term approach to future transport investment was needed. Much of the £80 billion is "old money" - that is, already-announced projects including the £3 billion Channel Tunnel high-speed rail link and part of Railtrack's own 10-year, £27 billion investment programme.
Rival political parties were keen to make as much capital as they could out of what they saw as Mr Prescott's "demotion". The Tories said his speech was "a smokescreen" and there was no real money for improvements.
Both the Liberal Democrats and the Labour MP, Ms Gwyneth Dunwoody, who chairs the Commons transport committee, expressed concern that Lord Macdonald would not be answerable to the Commons on transport policy as he was in the House of Lords.
Meanwhile, the rejected London mayoral hopeful, Mr Steven Norris, issued an 11th-hour appeal to Tory grassroots activists to rescue his campaign to become the party's official candidate for the job.
The former transport minister was dropped by the Conservatives' 12-strong selection panel after a letter from four senior local party officials from his old Epping Forest constituency claimed they had planned to deselect him as their MP over his extra-marital affairs.
But last night the Conservative mayoral college, expected to interview the four candidates left in the race, instead asked the mayoral executive to reconsider its selection.
The mayoral executive then decided it would leave the entire decision-making process to the party's board under chairman Mr Michael Ancram. The unusual move means that Mr Norris - the bookies' favourite to win the Tory selection before his candidacy was blocked - could be back in the running.
But the confusion left the Conservatives open to claims that its selection was turning into a shambles following Lord Archer's removal and the wrangling over Mr Norris.
One party member leaving last night's meeting at Conservative Central Office said: "I don't think anyone knows quite what it means."