PM's misjudgment over election that never was

Riding high in the polls following his performance in dealing with the outbreak of foot-and-mouth disease in southern England and the terrorist attack at Glasgow Airport, the Prime Minister allowed speculation to mount over a snap autumn poll.

Peter Watt claims the Labour Party had a full election team up and running by mid-September, marshalled by then-international development secretary Douglas Alexander.

Billboards were booked and advertising commissioned, including the famous poster bearing the slogan: "Not Flash, Just Gordon."

"The dogs of war were being readied, and across Whitehall it became almost received wisdom that a snap election was about to be called," says Mr Watt in his memoirs. "Labour HQ was a frenzy of activity – photographs were taken of every single candidate; campaigning materials were being designed for every Labour MP."

He reveals that Labour prepared a fleet of limousines to ferry government ministers around the country on campaign trips and all leave in the party had been cancelled to prepare for daily planning meetings.

But in the wake of the Conservatives' announcement that they would raise the threshold of inheritance tax, Mr Watt claims the Prime Minister blinked, influenced by the favourable reception the Tories were getting in the press.

He was further put off by the negative reaction to his visit to Afghanistan during the Tory Party conference and became spooked by a series of opinion polls that put Labour behind in certain key marginal seats.

His doubts grew with an excellent "off-the-cuff" speech given by David Cameron in which he directly challenged Mr Brown to call the election.

According to Mr Watt, an emergency meeting was called to discuss strategy: "A panicky Gordon summoned Ed Miliband, Ed Balls, Spencer (Livermore], Douglas (Alexander], Deborah Mattinson – Gordon's pollster – and Sue Nye – Gordon's senior adviser and trusted 'gatekeeper' – for a crisis meeting. On Friday morning, Douglas called me. 'Peter, Gordon's not going to do it,' he said quietly."

Despite the party spending 1.2 million on the campaign, the election was called off and the official announcement was made to the BBC on 13 October.

"I listened open-mouthed as he tried to pretend none of it had really happened," writes Mr Watt. "As he spoke, the fleet of limousines was aimlessly circling Parliament Square. They had come to Victoria Street, as arranged, to be picked up by staff who would collect ministers and whisk them off on the campaign trail. They were sent away on a pretext, to spare us the humiliation of anyone spotting them lined up outside our offices when Gordon finally called the game off."

He adds: "And so concluded the most farcical episode of Gordon's administration. Like the summer of love in 1967, by autumn it had all turned sour."

The PM's decision is widely regarded as a major turning point in his time in office, coming as it did before a series of setbacks in the polls the Labour Party has yet to recover from.