Labour Chiefs Deny 'Plot To Axe Blair'

The Labour Party's two most senior figures have denied a "brutal" plot to destroy Tony Blair after the 2005 election, as a probe was launched into leaked documents.

The Daily Telegraph claims Ed Balls , as well as Labour leader Ed Miliband , began scheming to divide their party within weeks of the general election.

The paper said the plot was codenamed Project Volvo and it was launched as London was under attack from Islamic terrorists.

A Cabinet Office investigation has now been launched into how the documents were leaked.

But both Mr Miliband and shadow chancellor Mr Balls moved to quell talk of their involvement in any coup to unseat Mr Blair.

Mr Miliband told Sky News: "I think what you are seeing is an overhyped version of ancient history.

"Frankly, the era of Blair and Brown is over. This generation of politicians is not going to repeat the mistakes of Blair and Brown."

Mr Balls told Sky News: "The fact that the first time I knew that they'd been taken was last night when they appeared in the Daily Telegraph I think shows that I didn't think this file, these documents were of great significance.

"The last time I saw them was when they were on my desk in the department before the general election.

"I don't know how they've been taken. I'm glad that's now being investigated.

"But the idea that these documents show that there was a plot or an attempt to remove Tony Blair is just not true.

"It's not justified either by the documents themselves, or by what was actually happening at the time."

But Mr Balls did amit to friction between the Brown and Blair camps.

"The fact is, after 2004 and [from] then on there's a discussion between Gordon Brown, Tony Blair and others, which included myself, about how we manage that stable and orderly transition," he said.

"There were discussions, there were negotiations. There is nothing here to justify the claim of a plot and therefore, for me, that's obviously a bit frustrating today.

"The reality was Gordon Brown and Tony Blair had achieved great things together, but by this period it was hard.

"The relationship was under stress, there was a lot of pressure, there were difficulties, there were arguments.

"I think people will look back and say that it could have been done better. I agree with that and there's a lesson for us here as a party."

The Telegraph says it has seen letters between Mr Blair and Gordon Brown which reveal the extraordinary rift at the heart of Labour.

It claims the documents show for the first time Mr Brown's feelings towards Mr Blair in his own words and handwriting.

This was material which has previously only been the subject of speculation and second-hand reports from anonymous sources.

Mr Brown apparently makes it clear, in a series of memos, that he regarded his rival as a "muddled" lightweight whose obsession with spin destroyed trust in politics.

Conservative Party chairman Michael Fallon MP said the leak showed Mr Balls could "not be trusted".

"First he denied this at the time, [but] now we know it's true," he said.

"It shows he's completely unsuited to be a serious figure in government. He simply couldn't be trusted, for example to plot against his current leader Ed Miliband."

According to the documents, Mr Brown used the perception of "lies" over the Iraq War to try to force Mr Blair's early departure.

Mr Brown, it is reported, ordered Mr Balls to take a "brutal" approach to cleanse the Labour Party of Mr Blair's influence.

Mr Blair's memoirs, the updated version of which were published yesterday, detail his frustration with his chancellor's behaviour. In one memo, he warned Mr Brown that the "division at the top is killing us".

The Telegraph says the "Ed Balls files" - the personal papers of Mr Balls which have been passed to the paper - set out in detail how those around Mr Brown plotted from July 2005 to remove Mr Blair from No 10.

They give an insight, the paper claims, into Mr Balls' central role in the plot, with Mr Brown passing his former aide the most secret memos that Mr Blair sent to him in confidence.

The files disclose details of secret meetings, opinion polls on Mr Blair's policies and how Mr Brown's allies tried to rebrand his image.

Three of the key players named now occupy the most senior positions in the Labour Party: Mr Balls, Mr Miliband and Douglas Alexander , the shadow foreign secretary.

More than 30 people, including figures in politics, business and the arts, are named as being involved. Most were rewarded with peerages or government positions by Mr Brown.

Private memos between Mr Brown and Mr Balls, published by the Telegraph, heavily criticise Mr Blair, and the pair discussed how to undermine the prime minister.

The disclosure of more than 30 documents will call into question Mr Balls' senior role in the party, the paper claims, as he emerges as a deeply divisive character whose public statements and private activities have been at odds.

Mr Balls has previously insisted he had "never ever" been involved in attempts to undermine colleagues.

The files appear to show how Mr Balls was at the centre of an extraordinary attempt to broker a deal between Mr Brown and Mr Blair to let the Chancellor become prime minister.

In February 2006, the Telegraph reports, Mr Blair sent Mr Brown a secret unsigned letter setting out terms of a proposed deal.

The letter says: "You (understandably) want me to go now.

"You need to be the candidate of continuity and change. The second will be relatively easy to do. A different person is, by its nature, change.

"The first, however, rests on a smooth transition.

"Critical to that is not merely the absence of disunity in the handover; it is also the visible, clear demonstration that the person who most embodies NL [New Labour], i.e. me, is working hand in hand with the successor."

He suggests a five-point deal that includes Mr Brown leading on party reform, democratic renewal and work to tackle Islamic extremism.

The pair would work together and Mr Blair would then announce he would leave in summer 2007.

Mr Blair concludes that "in return" he would need "full help and co-operation in getting through his own reform agenda: NHS, schools, respect, welfare and energy".

He ends with a warning: "Whilst I remain PM, the final decision has to be mine; and that cannot provoke a breakdown. I will try, at all costs, to avoid disagreement, but there can't be stalemate if it happens."

On a copy of the letter he passed to Mr Balls, Mr Brown apparently scribbled the words "shallow", "inconsistent" and "muddled". The pair responded by drawing up their own terms.

In a draft of his deal document, which he intended Mr Blair to sign, Mr Brown wrote: "I propose the following: Across a wide range of areas you [Brown] are put in charge of future working groups beyond economic policy so that Labour with you leading is seen as party able to meet big challenges of future."

"You [Brown] will however set out with my full support and that of my team, the agenda for beyond 2007 and for the next parliament."

Mr Brown also set out the need for written six-month, twelve-month and two-year plans, and a written agreement for strategy to deal with David Cameron. He also demanded a role in Cabinet reshuffles and that he attend international meetings.

Mr Blair, who is understood to have been incensed by the rudeness of Mr Balls, rejected the proposals, the Telegraph reports.

The talks were the culmination of more than six months of plotting by the Brownites.

The files show that the plot began on July 19, 2005, less than a fortnight after the terror attacks on London. Mr Balls had only become an MP at the election in May.

Six of those closest to Mr Brown - Mr Balls, Mr Miliband, Mr Alexander, Sue Nye, Spencer Livermore and Ian Austin - formed a "small group" to perform tasks including winning over MPs, unions, party members and think tanks.

Sarah Brown, Mr Brown's wife, was also asked to persuade senior women in Labour to back her husband.

Responding to the latest allegations, a senior Labour source told Sky News: "This is ancient history. We are a party looking to the future.''