Labour derides memo saying 'UK government is a shambles'

Britain's ruling Labour Party yesterday poured scorn on a memo that cast doubt on its chances of winning an election if finance minister Gordon Brown takes over from Prime Minister Tony Blair next year.

The Mail on Sunday newspaper said the memo, which suggested Mr Blair's government was seen as a "shambles" and mooted blooding a new generation of leaders, had been compiled by the prime minister's senior advisers.

A spokesman for Mr Blair denied the memo had been written by his staff and said it did not reflect the prime minister's views. But this failed to quell speculation the document may have been written by someone else in an advisory role.

Mr Blair has said he will step down next year after a decade in power. The memo painted a bleak picture of Labour's chances at the next general election, expected in 2009, against the resurgent Conservative Party led by David Cameron.

"The government is seen as a shambles," it said. "The public are clearly preparing to shift to the Conservatives if they prove themselves credible over the next two to three years."

"Compounding this is an erosion of Gordon Brown's position against David Cameron. We can rally round as a party and attempt to solve the problems facing Britain," the memo said. "Or we can go for a total renewal, moving to a new generation, effectively forming a new government while still in power."

Mr Blair, who is still unpopular in his Labour Party for going to war in Iraq, announced plans to quit next year after he faced a revolt by some party members this year.

This stoked speculation about whether Mr Brown would move into the top job he has long coveted or a younger candidate would be groomed to take on Mr Cameron.

The memo could be a new embarrassment for Mr Blair, days after police questioned him as a witness in an investigation into whether the Labour Party awarded state honours such as places in the unelected upper house of parliament in return for loans.

Deputy Prime Minister John Prescott described the memo as "colourful reading" and said it should be treated with "disdain" but that it may have been written by someone at a junior level.

"I can't be sure that it might not be a teenybopper (youth) on the side giving some kind of information and advice," he told the BBC, adding that the Mail on Sunday had its own agenda as a long-standing backer of the Conservatives.