New peace within Labour is unconvincing MI6 backtracks on WMD intelligence

UK: It is senior Labour figures, not political enemies or journalists, who are fuelling speculation about whether Tony Blair…

UK: It is senior Labour figures, not political enemies or journalists, who are fuelling speculation about whether Tony Blair's time is up, writes Frank Millar

Did Tony Blair really think of quitting last month? And might he yet walk away - or find himself forced out - before the autumn? It is bleak midsummer, and this may not be just the usual July madness that sometimes grips the Westminster hothouse before the eagerly awaited recess.

Some of Westminster's sharpest and best informed observers have long held that Mr Blair might well choose the autumn to give Gordon Brown his best (and possibly only) chance both to become prime minister and to win a general election in his own right.

Mr Blair appeared determined to nail such speculation, insisting he was still "up for it", his enthusiasm for the job undiminished. The chancellor, likewise, appeared resigned to the fact that Mr Blair would take Labour into the general election and that it would be "Prime Minister Blair" who would lead in the subsequent referendum campaign on the European constitution.

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Yet there was something unconvincing about the sudden peace that descended in the middle of last month following Labour's disastrous performance in the local and European elections. And now, three days before the Butler Inquiry report into British Intelligence failures in the run-up to the war in Iraq, Mr Blair's leadership, his place in history - and, even, his eventual place in Heaven - is the dominant talking point.

The Archbishop of Canterbury, Dr Rowan Williams, says the prime minister will have to account to God for Iraq "at the judgment seat". The Liberal Democrat leader, Charles Kennedy, is praying meanwhile that the electors in Leicester South and Birmingham Hodge Hill will deliver a more earthly verdict on Blair's political judgment in Thursday's two by-elections.

The government risked the proximity to Butler, opting for speedy by-elections in the hope of stalling a Lib Dem bandwagon. Nor, though the connection will inevitably be made, is Lord Butler's report likely to be the determining factor in either Labour-held seat.

However, if the Lib Dems manage to win either - and Butler is anything like as rough as Number 10 now fears - then the week will end with fresh headlines about Blair's leadership and the succession.

In passing it should be noted that a real political disaster will have been inflicted on the Conservative leader Michael Howard, should the main opposition party come third in both contests. Yet the knowledge that the voters do not yet see the Conservatives as an alternative government-in-waiting seems only to fuel the argument that Labour should "renew itself" in government by getting rid of Mr Blair. To which should be added that the continuing interest in this story is not down to the efforts of embittered former ministers like Clare Short, or the preference of journalists for personalities over policies.

It is the Blairites and the Brownies, senior members of the government from Deputy Prime Minister John Prescott down, and assorted camp followers like Alastair Campbell and Peter Mandelson who keep giving it "legs". Just last Wednesday Mr Mandelson was telling Mr Campbell in that bizarre yet compelling Channel Five interview that Gordon would indeed succeed Tony when the prime minister either stepped down or lost an election. Mr Prescott famously talked of "the (tectonic) plates shifting" and ministers positioning themselves for the succession. And just this weekend the BBC's political editor, Andrew Marr, named four ministers who helped talk Mr Blair out of resigning a month ago after he experienced "a long night of the soul". Education Secretary Charles Clarke made a good effort at rubbishing Marr's story yesterday. He admitted asking for five minutes for a "one to one" chat with the prime minister because of all the "media hype" - to offer support and ask what he could do to help - only to discover it required just "about 30 seconds" because the PM was in fact pretty "chipper". Cabinet colleagues John Reid, Tessa Jowell, and Patricia Hewitt likewise insisted there had never been any question of Blair standing down. Yet these not-quite-denials only reinforced Marr's claim that there had been at least a serious "wobble."

Is the wobbling now at an end? The answer is almost certainly no because it is rooted in the personality faultline at the heart of New Labour. Which brings us back to that unconvincing outbreak of peace last month. In the febrile pre-election period the endless talk was of the threat to Blair's position. If the elections proved as bad as predicted (which they did) the expectation was that the Brownies would press their advantage, arguing that Blair had lost the public's trust and that it was time to prepare for an orderly succession. Instead, silence. Was this really because Tony and Gordon were working more closely than ever before? Or had Mr Brown's champions convinced themselves that Mr Blair was in fact preparing to go? Some close to Mr Blair think this entirely possible, in which case we can expect a fresh outburst of hostilities sometime soon.

The chancellor of course will be all smiles this afternoon, announcing public spending plans certain to flatter him rather than Mr Blair. But unless they finally close down the question of the succession, they will hand the Conservatives a gift and enter the general election with their power play on full public display.