Amid storm over letters, Ed Balls denies 'nasty' plot

A series of letters between Mr Blair and Gordon Brown, which have just been uncovered, reveal the then Chancellor ordered his close ally Mr Balls to take a "brutal" approach to force the then prime minister to make way for him as party leader.

More than 30 secret memos belonging to Mr Balls also name current Labour leader Mr Miliband and Shadow Foreign Secretary Douglas Alexander as being involved in "Project Volvo" - an attempt by his allies to rebrand Mr Brown. It was named after the car they believed voters most associated with Mr Brown, in contrast to a "Sports car, BMW" for David Cameron.

In one document, Mr Miliband is listed as being responsible for Mr Brown's future "policy", while another suggests Brown loyalists in the Cabinet began scheming on the day London was attacked by Islamic terrorists in July 2005.

One paper shows Mr Miliband was given the task of showing how Mr Brown's politics were defined by "third world idealism, environmental action, community spirit and an ethos of public service", rather than spin.

The Shadow Chancellor yesterday admitted that he took part in "negotiations" about Mr Blair's departure and admitted that the handover of power "could have been done better".

Mr Balls had always previously denied reports that he was involved in plots against Mr Blair. Last year, he described such reports as "complete and utter total balderdash and rubbish".

But Mr Balls claimed there was "no nasty edge" to talks and denied plotting against former prime minister Mr Blair, claiming that he had been "trying to keep things together" at the top of the Labour government during the internecine warfare between its two senior figures.

Whitehall officials yesterday launched a probe into publication of the documents, believed to have disappeared from the Department for Education - Mr Balls' former department - during last year's general election.

The Cabinet Office is looking into whether there were any "breaches of document security within government" amid reports that the documents fell into the wrong hands, when they were not among papers delivered to his Commons office by the Department for Education.

Mr Balls yesterday said the documents did not prove he had been involved in trying to topple Mr Blair, claiming suggestions of attempted coups were "untrue."

He said: "The last time I saw them was when they were on my desk in the department. I don't know how they were taken. The idea that there was a plot or a coup is untrue and not justified by these papers.

"I lived through these years. I know what happens when people allow personalities and debates and fights to get in the way of the national interest. I was part of trying to hold things together in difficult times.

"There are important lessons to learn. People want to know that the Labour Party has learned them. We have, 100 per cent. That is why we are not going to be diverted by these kind of false and mendacious allegations."

Meanwhile, Mr Miliband insisted he was not going to make the same "mistakes" as Mr Blair and Mr Brown, as he dismissed the reports about the leaked documents as "ancient history".

He said: "Everything wasn't always perfect about their relationship. We are not going to make those mistakes. Frankly this is ancient history - that era is over and we are looking forward to the future."

The papers also include letters between Mr Blair and Mr Brown, which show them haggling over terms of a handover.

Mr Blair had said he wanted to serve a full third term, but one document, sent to him by Mr Brown, shows the chancellor sought to bring that forward.

Mr Brown asks Mr Blair to agree to certain commitments, including: "I will make it clear at the 2006 conference it was my last; call for an immediate leadership election to be resolved by December.

"I accept that decisions about the party's future beyond 2007 and all public spending decisions after 2007-8 are for you (Mr Brown] to resolve."

The files show how Mr Blair wrote to Mr Brown in February 2006, accepting that "you (understandably) want me to go now", but saying that care must be taken to ensure the new leader is seen as "the candidate of continuity and change".

He said: "This would require a 'clear demonstration' to the public that Mr Blair, as the embodiment of New Labour, was 'working hand in hand with the successor'."Suggesting he would leave in summer 2007, Mr Blair said in return he would need "full help and co-operation" on reforms to the NHS, schools, the respect agenda, welfare and energy.

A set of memos from Mr Brown - littered with spelling mistakes and in block capitals - show how he tried to seize the agenda and prepare for battle with David Cameron through tours, speeches and books.

One memo to his aide Sue Nye and Mr Balls in 2005 said they needed to draw up a plan for "both election and inauguration" as Labour leader, identifying supporters and producing a "narrative" for Mr Brown's elevation to No 10.