Downing Street has sung the praises of Gordon Brown in a bid to quell speculation about a serious crisis of confidence between the prime minister and his chancellor.

In a calculated intervention, Number 10 said Tony Blair and Brown worked "extremely closely together" and denied suggestions that the relationship was at an all-time low.

Speaking on Monday, the prime minister's spokesman said: "He [Brown] is recognised as one of the finest finance ministers anywhere in the world - and quite right too."

Praising the chancellor's management of the economy, Number 10 said the government "would not be where we are today" had it not been for Brown.

Mowlam Claims

Over the weekend, Mo Mowlam, who resigned from the government at the last election, said the government was being damaged by the hostility between the two senior ministers.

Number 10 rejected Mowlam's claim that the relationship was no longer working. The prime minister's spokesman dismissed Mowlam's account as "not a picture that we recognise".

"It is a fact that the prime minister and the chancellor work extremely closely together. Their relationship is one of the great strengths of this government," he added.

Problems

Privately, aides to both the chancellor and the prime minister have let it be known that serious differences of opinion exist.

Blair is said to be angered at the chancellor's insistence that the current surplus should be used to fund tax credits rather than frontline public services.

He is also said to be frustrated at Brown's failure to make a solid case for the single currency.

Meanwhile, Brown is said to be increasingly resentful at Blair's failure to say whether he will stand aside before the next general election.

The most recent meeting between the two is said to have ended with Brown "shouting and swearing".

Despite the claims, sources close to the prime minister say that Brown and Blair will be meeting "more than usual" in the run up to next week's pre-Budget report.

The spokesman denied that the chancellor was masterminding the government's entire fiscal strategy, saying it was a product of "detailed discussion" between the prime minister and his chancellor.