Brown aims to snatch victory from jaws of defeat

An election in a small Scottish constituency next week will give British Prime Minister Gordon Brown an idea of whether he can turn support for his handling of a financial crisis into electoral success.

Three months ago Brown's ruling Labour party unexpectedly lost a parliamentary seat in a traditional Scottish Labour heartland to pro-independence Scottish Nationalists.

Brown, a Scot, was facing a growing party rebellion and the main opposition Conservatives looked on course to crush Labour in Britain's next parliamentary election, due by mid-2010.

But Brown has narrowed the Conservatives' lead in opinion polls with his handling of the financial crisis, winning praise in Britain and abroad for a 400-billion-pound package of loans and guarantees to prop up the financial sector.

"Brown is trying to portray himself as somebody who almost saved the world in the economic crisis," Thomas Lundberg, lecturer at the University of Glasgow, said.

The outcome of Thursday's election of a member of British parliament in Glenrothes in east central Scotland, following the death of the sitting Labour parliamentarian, could now be much closer than expected.

The Conservatives still lead Labour across Britain by nine percentage points, according to a survey by YouGov research group published by the Daily Telegraph newspaper today.

But Labour trailed by more than 20 points a few months ago -- its lowest ratings since polling began.

Labour is defending a large majority in Glenrothes, next to the Kirkcaldy constituency held by Brown, but it also had a big majority in Glasgow East before its defeat there on July 24.

Bookmakers make the Scottish National Party (SNP) the favourite to win but Brown took the unusual step of campaigning in Glenrothes, suggesting he believes victory is possible.

Sitting prime ministers do not usually campaign in such elections, but Brown wants to maintain the momentum of labour's resurgence in the polls as Britain heads into recession.

Some opinion polls have indicated that Britons see Brown, a former finance minister, as a good leader during an economic crisis but do not want him to win Britain's election in 2010.

The economy is a major issue in the election in Glenrothes, a former coal-mining area with 88,000 people, but much may also depend on whether the financial crisis has changed attitudes towards Scottish independence.

SNP leader Alex Salmond had long said small independent nations such as Iceland, Ireland and Norway offered a blueprint for economic success an independent Scotland could follow.

But the case for Scotland surviving a financial crisis on its own lost some credibility when Iceland had to seek aid from the International Monetary Fund to restructure its banking system, which collapsed in the global credit crunch.

"In terms of the cost of the (British) rescue package, it is well in excess of the Scottish budget ... so if Scotland had been an independent state, that kind of rescue plan may have been difficult," said Amit Kara, UK economist at UBS.

Not all Brown's rescue measures were popular in Scotland.

Some people are angry that Royal Bank of Scotland <RBS.L> and HBOS <HBOS.L>, Scotland's most prestigious banks, are likely to be part-nationalised in return for government capital injections. HBOS is being taken over by Lloyds TSB <LLOY.L>.