Brown tells MoD to axe bureaucrats

• MoD challenged to axe civil servants not regiments in spending review

• Challenge continues Gordon Brown’s rhetoric on cutting government waste

• Brown's tough stance comes as Blair begins difficult week

Key quote

"Gordon [Brown] may or may not be a candidate [for the Labour leadership and Prime Minister]. Others may or may not be candidates" - Charles Clarke, Education Secretary

Story in full GORDON Brown, the Chancellor, will today challenge Geoff Hoon, the Defence Secretary, to sack civil servants instead of making cuts in frontline armed forces.

Mr Brown will make it clear that he believes his Comprehensive Spending Review will give the Ministry of Defence enough money to avoid axing regiments - if it is prepared to make some major reductions in bureaucracy.

The Chancellor will step up his rhetoric on cutting government waste, pledging to get rid of up to 80,000 civil service jobs. If Mr Brown has his way, many of those cuts will be at the MoD, which, as The Scotsman revealed last week, has more civilian staff than the army has soldiers.

A last-minute plea to the Chancellor for more money is unlikely to have won the MoD any improvement in its planned rise of 1 per cent above inflation, an allocation that military chiefs say will lead to cuts, including the merger of some of Scotland’s army regiments and the loss of frontline personnel in all three armed forces.

The Scotsman understands that instead of providing more cash, Mr Brown will demand that Mr Hoon finds money from within his budget by slashing administrative costs and curbing waste in the notoriously inefficient defence procurement system. Following today’s spending announcement, ministers and officials from Downing Street, the Treasury and the MoD will try to agree detailed plans for defence spending over the coming years.

The Chancellor has been stung by suggestions from military insiders and opposition parties that he is planning to drive through cuts that would force the MoD to axe frontline forces. He will insist that the MoD must make savings from its civilian establishment and not cut into its operational military spending.

Mr Brown’s plan to deflect allegations that he is starving the armed services of cash emerged yesterday, as allies of Tony Blair were forced to rally round the Prime Minister and reject reports that he had become demoralised and was close to quitting last month.

Cabinet ministers, including John Reid, the Health Secretary, and Charles Clarke, the Education Secretary, admitted they had taken the unusual step of assuring the Prime Minister he had widespread support in the Labour Party to stay in office.

The contrast in the fortunes of Mr Blair and Mr Brown could not be more stark this week.

Mr Blair faces renewed controversy over Iraq as Lord Butler’s investigation into pre-war intelligence is set to condemn the information-gathering and assessment process on which the Prime Minister based his decision to go to war.

In another blow to the Prime Minister, a Panorama investigation for the BBC last night suggested that MI6 chiefs have reassessed and rejected the original intelligence that led them to claim Saddam Hussein was continuing to produce weapons of mass destruction.

The Butler Report is due out on Wednesday. The next day, Labour insiders are braced for punishment from voters in by-elections in Leicester and Birmingham. Labour losses may spark fresh doubts about whether Mr Blair is still an electoral asset for the party.

Mr Brown, by contrast, hopes to bask in political and public approval, today setting out his fourth Comprehensive Spending Review.

As well as confirming cash boosts for health, education, transport and the Scottish Executive, Mr Brown will step up his "war on waste". He will also try to underline his leadership credentials with generous awards for national security, and appeal to Labour traditionalists with a drive to eradicate child poverty.

Mr Blair’s allies are concerned that supporters of the Chancellor may renew their attempts to undermine the Prime Minister in the hope of installing Mr Brown as leader before the next election.

But according to the Sun newspaper today, Mr Blair has vowed to remain in No 10 for another five years. The PM has told allies he will serve a full third term if he triumphs at the next election - and could even stand for a fourth, the paper reports.

Insisting the Prime Minister is "chipper" and "completely up for it", Mr Clarke yesterday delivered a blunt warning to Mr Brown and his backers, dismissing any suggestion that the premiership could be simply handed over to the Scot.

"There will be a normal leadership election at whatever time and whatever circumstances in the normal way," said Mr Clarke, who is regarded by some MPs as a potential challenger to Mr Brown. "Gordon may or may not be a candidate. Others may or may not be candidates."