Blair: 'no deal'

Tony Blair is set to go for a third term as prime minister in a move which is likely to dash Gordon Brown's hopes of becoming Labour leader.

According to a new book, written by radio presenter Jim Naughtie, Tony Blair is set to break a "leadership pact" entered into with the chancellor following the death of John Smith in 1994.

Naughtie claims Blair will turn his back on the agreement with Brown as he pursues a historical third Labour term.

"Blair has two objectives. One is to win a referendum and take Britain into the single currency. The other is to win a third term. A second-term succession for Brown seems to depend on an Act of God, a runaway number 24 bus in Whitehall or a sudden change of heart on Blair's part," says to book which is serialised in The Mail on Sunday

Whilst Blair and Brown are known to work closely, with the prime minister giving his chancellor total responsibility for the economy, the book suggests that Blair rejects talk of handing over the reigns to his political rival.

Asked if he had entered into a secret deal to hand over the leadership to Brown before the next election, the book reports Blair as saying "asolutely not".

However, Naughtie suggests that Blair's desire for a third term does not mean that he does not want Brown to become prime minister. "Blair still says he hopes Brown will succeed him, but the second term is meant to have its climax in the referendum and not in Blair's retirement. Then Blair would go for a third term," the book says.

"Brown, who would share the credit for a successful referendum and could hardly choose that moment to mount a coup d'etat, would have to decide whether he wanted to stay chancellor or step away from the government."