Ken Livingstone has urged Labour to "heal the rift" that saw him expelled from the party, and hinted that a reconciliation may be close at hand.

The capital's mayor warned Millbank party bosses on Thursday night that a battle between him and Labour during London's next election in May 2004 "would simply assist the Tories".

Livingstone was expelled for five years after running against - and defeating - Labour's candidate, Frank Dobson, in the inaugural mayoral election in 2000 following a rancorous internal selection procedure.

Allowing Livingstone back by 2004 would need a special deal or for Millbank not to field a candidate against him.

Reconciliation

If Livingstone stood against Labour in May 2004 another ban could rule him out of the party, and the Labour party out of Romney House, until the end of the decade.

Pragmatists inside Labour's HQ are said to be looking for a deal - a move is bitterly opposed by influential London MPs.

"I start from the point of view that I want to heal the rift which was opened up by the rigged selection process to choose Labour's candidate for mayor of London," Livingstone said on Thursday night. "I have made it clear that I would be delighted to run as the official Labour candidate for mayor in 2004."

Addressing a meeting of London Labour Party activists, Livingstone hinted a deal to bring him back into the fold may be close.

"My sense is that, overall, there is considerable will on all sides to continue to move that agenda forwards," he revealed.

The mayor, once branded by Tony Blair as a "disaster" for London, now says he has "developed excellent and productive working relationships with Labour ministers".

"There is considerable and friendly co-operation on almost every aspect of policy from transport to planning and the environment," he said.

Record of disloyalty

Talk of a peace pact between Millbank and Livingstone has brought anger from senior London Labour MPs who say he should not be allowed to return because of what they claim is his disloyalty to the party.

Former sports minister Tony Banks - widely tipped as a possible candidate in 2004 - firmly rules out a pact with his former GLC colleague.

"He treated the party with contempt. He dumped all over the party. He lied to the party about his intentions. He humiliated our official candidate. He can't use the party in the way he tries to do so," he told ePolitix.com.

The West Ham MP believes a deal rehabilitating Ken before his ban ends would send out the wrong message about Labour.

"It's a political party not a buffet party. You can't decide you are going to take this bit or that bit and choose to ignore the bits you don't like. It's a package and that being so Ken has got to do his period of penance," he said.

Ilford South MP Mike Gapes also believes that Livingstone has effectively left Labour and must serve the ban.

Like Banks, the Home Office PPS believes Ken has been less than honest with his Labour colleagues and raises the issue of a broken 1998 Livingstone pledge to only stand for one term.

"He made a promise that he wouldn't stand against the Labour candidate and then broke it. He promised that he would only stand for one term and it appears he is now breaking that," Gapes told this website.

Support for Ken

Livingstone rejects the argument that he was disloyal or put his own interests before those of Labour.

He believes "vote rigging during the mayoral selection procedure tore the London Labour Party apart" and his support vastly outstripped that of the official Labour candidate and former health secretary, Dobson.

"Wherever Labour Party members or trade unionists held ballots, my lead was overwhelming. If we add up the votes of all Labour Party members, trade unionists and MPs who voted in the contest, I received 74,000 to Frank Dobson's 24,000," he said.

In fact, Livingstone says he made efforts to avoid a party split and avert an exodus of "Ken for mayor" supporters from Labour.

"I urged Labour Party members to stay members of their party. I assiduously ensured that wherever possible Labour Party members did not expose themselves to expulsion by signing my nomination papers," he said.

Electoral arithmetic

Banks argues Livingstone's desire to get back in Labour's good books is motivated by self-interest.

"Ken obviously feels that it is necessary for him to come back into the party. I can assure you that if Ken felt there was no threat to him whatsoever he couldn't give a monkey's toss about the Labour Party," he said. "He is not the most imaginative of people but he is one of the most exploitative."

The Wset Ham MP believes standing against Labour has left Livingstone with only one choice.

"He obviously felt he was bigger than the party the last time and that the party was not something he needed. He has made his bed, let him lie in it. Let him stand as an independent," he said.

Gapes "very strongly" believes his party must field a rival candidate in 2004 to oppose "an anti-Labour" mayor.

"It is not difficult for Labour to field a candidate. We need a Labour candidate for mayor. Ken Livingstone stood as an anti-Labour candidate and is an anti-Labour mayor and therefore I think its is important that the Labour Party runs against him," he said.

A poor result in May's local elections will concentrate Millbank minds and Livingstone calculates London's "electoral arithmetic" could add up to a 2004 "Labour versus Ken battle" playing into the hands of the Tories.

"The electoral arithmetic and the demographics of London mean that the only possible scenario next time is a run-off between me and the Tory Party. What Labour decides to do in the election therefore could be decisive. Labour could choose to run flat out against me in 2004 in the full knowledge that that Labour candidate could not defeat both me and Tories. Such a strategy would divert from the main battle between myself and the Conservative candidate, and would simply assist the Tories," he said.

Risky policies?

Both Gapes and Banks believe a Livingstone victory, two years down the line, may not be a fait accompli.

Deeply unpopular now, the government's part-privatisation of London Underground "may not be much of an issue" in two years time, claims Banks.

"It depends how far down the line we have actually gone. If things are progressing OK it won't be as big an issue as if, for example, the election was tomorrow," he said.

Gapes believes that threatened legal challenges by Livingstone to the PPP deal could rebound on the mayor by 2004.

"If Ken Livingstone has taken legal challenges which delay the investment, that may be a problem in terms of getting the money we desperately need into our stations, our track, our trains and signalling as quickly as we would have done."

Livingstone's controversial transport flagship - £5 congestion charges - may prove his undoing.

Refusing to bow to pressure to delay the measure - due next year - or hold an inquiry, Ken has said that putting the scheme on hold would put him "in the same contemptible category of politicians I have always loathed, who never want to take a difficult decision".

Gapes told ePolitix that this central policy could be "a serious problem".

"Congestion charging is the wrong scheme in the wrong place at the wrong time. I think it is ridiculous and foolish to introduce congestion charges before you have improvements in capacity on the Underground system. I think if he goes ahead and forces it through in February it could well be a serious problem for him."