Gordon Brown did not sleep well on Friday night. His plans to have a quiet Saturday, waving his son John off on a mothers-and-children fourth-birthday treat to Whipsnade zoo before settling down in front of the television at No 10 to watch the England v Australia game in the rugby World Cup, had been thrown into doubt. Friday had been a day of ominous news.

That morning one opinion poll had put the Tories neck and neck with Labour, while another had seen Brown’s lead cut to just three points. His advisers had also warned that the opinion polls were not going to get any better this weekend.

Of course, he did not know that today’s Sunday Times poll would put the Tories ahead for the first time in three months, but it was clear which way the political wind was blowing.

David Cameron’s speech to the Tory conference in Blackpool had gone down well with the public but, more significantly, the polls showed that the Tory proposal to increase the threshold for inheritance tax to £1m had struck a chord with voters.

After keeping his key aides in the dark about his intentions for so many weeks, the prime minister had finally called an election summit on Friday morning.

Present at the meeting were Spencer Livermore, Brown’s chief political adviser, Ed Miliband, the Cabinet Office minister charged with writing the Labour manifesto, Sue Nye, the prime minister’s “gatekeeper”, Douglas Alexander, the election co-ordinator, and Stan Greenberg, the leading American pollster who had advised Tony Blair and Bill Clinton, the former US president.

Sitting in a wood-panelled, book-lined room at No 10, they waited with anticipation. Most of them were expecting the starting gun to be fired for a three-week election campaign.

Livermore, 32, a “young turk”, as well as other youthful cabinet ministers such as Alexander and Miliband, had been in and out of Brown’s office on an almost hourly basis last week, urging Brown to go for it. They pointed to Labour’s good showing in the opinion polls before the Tory “Blackpool bounce”, with surveys reflecting a double-digit lead and the enticing prospect of a landslide.

However, the ever-cautious Brown wanted a final run-through of the figures. Should he or shouldn’t he go for a November election?

Greenberg fired up his lap-top and projected his findings on a large television in Brown’s office. Like a doctor unemotionally giving a prognosis, Greenberg broke the news to the prime minister as he had done with his other political “patients” over the years.

“Gordon,” he said, with his matter-of-fact New York drawl. “The good news is you will win this election if you call it . . . but the bad news is that I can’t guarantee what your majority will be and if you’ll win outright.”

It was a frank but devastating verdict. Brown left the room trying to look cool.

“That’s very interesting but I’ve got to go to a meeting on Burma,” he said.

Brown told his closest aides that he would “sleep on it”. He had weighing down on his shoulders perhaps the toughest decision that he had faced in his political life.

A week ago he could still do no wrong. He had successfully seen off terror attacks, summer floods, foot and mouth and potential financial meltdown precipitated by the run on Northern Rock, the banking group. Meanwhile, Cameron had messed up on grammar schools, hospital closures and a trip to Rwanda. Brown appeared to be the master of all he surveyed.

He followed it up with a solid first Labour conference as prime minister, delivering a speech that was full of political vision, albeit short on practical detail, that went down well with the party faithful in Bournemouth.

Brown’s advisers had anticipated the positive boost the Tories got from their Blackpool conference last week, but they were not expecting to be blown so far off course. They were shocked by the opinion polls on Friday which showed that the Labour lead had been cut, at best, to four points and, at worst, to level-pegging at 38%.

“We did loads of tracking polls during the Tory conference. Cameron’s speech did not feature, but what really hit us hard was the promise to raise the threshold on inheritance tax,” said one No 10 aide.

All the pressure was now on the prime minister. His aides were the ones who had been stoking up election fever, initially as a ruse to frighten the Tories into giving away all their announcements. Yet the tactic backfired and late last week it was Brown who was on the back foot. He had set the election train in motion, with Labour aides told to resign their contracts and print hundreds of thousands of leaflets.

Yesterday Brown suddenly applied the brakes and decided that a snap election would be kicked into the long grass. It was off the agenda.

So why did he march his troops up the hill, only to march them back down again? Why has he, in the words of the Tories, “bottled it”? And what are the consequences of his 11th-hour decision to put off going to the country to claim his own mandate?

While Brown insisted last week that he was concentrating on running the country, the reality was very different. The election machines of the two leading parties had been cranking up at breakneck speed.

Labour had booked advertising hoardings while scores of sympathetic staffers at pressure groups, public relations firms and the trade unions were told to be on stand-by to hand in their notice and join the campaign. Inquiries were made about the Queen’s movements to ensure she would be in London if Brown needed to seek a dissolution of parliament, and television slots were reserved for Brown’s anticipated announcement on Tuesday.

Labour’s base camp in Victoria Street, close to the Houses of Parliament, was being readied in a hurry. Government advisers warned on Friday that there might not be enough space for everyone because, to save money, part of their floor had been rented out to a private company.

There was no doubt that they were on election alert. At a lunchtime meeting Joe Irvine, Brown’s political fixer, warned all special advisers to be ready. They were told that they must “cull” all the information they could get from the civil service in case there was an election, during which officials have to remain studiously “neutral”. They were further instructed to take computer memory “sticks”, put them in their office computers and then deliver the downloaded data straight to Labour HQ.

Everyone was given a role in the potential campaign. Ministers typically have two special advisers: one would be stationed in Victoria Street – space permitting – and another should go out on the road with their minister.

Miliband had already telephoned every cabinet minister asking for new ideas for the manifesto, which by the end of last week was mostly complete. At the special advisers’ meeting they were told that Brown would be studying 22 key marginal seats and this should be where they “target their energy”. These were particularly in the south of England, Northamptonshire, Kent and the West Midlands. The message was going to be, as Brown’s message was at party conference, “strength”. But strong the party was not.

At the meeting it was made clear that of thousands of leaflets to be printed some would bear the old Labour motif, because they had no time to do anything differently. Even at party headquarters, Irvine had to admit there were not enough desks for most cabinet ministers’ advisers.

“If there had been an election, let’s face it, we would have been knackered,” said one activist. “Most local parties were just not ready. Even though we could have probably got people on the knocker, it would have been a struggle.”

There was also the perennial question of the party’s parlous finances.

Labour has enjoyed a significant funding surge in recent months. According to Electoral Commission figures, from April to June the party received a total of £5m in donations, more than £1.5m up on the same quarter last year under Blair. Yet the party still has net debts of £20m, including £14m of outstanding loans. Not a great platform on which to fight an election.

Labour sources, however, have repeatedly insisted that despite the “challenging position”, the money will be there to fight a general election, even if a November poll needed money “thrown at it”.

The feeling that a snap election would be a “rush job” with a resulting capacity for complications was not restricted to Labour officials. Last week electoral officers warned the government that they would struggle to cope if an election were called in the next month and that up to 1m voters could be left disenfranchised.

At a meeting with the Ministry of Justice on Monday, the Association of Electoral Administrators voiced “strong” concern about the prospect of a November election.

They said they would be forced to use an out-of-date electoral register which would not include large numbers of the population who have turned 18 or moved home since last December. A new register will come into effect on December 1.

Returning officers had also reported that they would struggle to book polling stations, appoint staff and deal with thousands of postal votes in such a short period of time. Their comments are understood to have been fed back to No 10.

Of course, more than any other factor, the state of the opposition was the key to Brown’s decision.

If anything, the Tories were almost better prepared for a campaign than their rivals, despite the disadvantage of having no say about the timing of the poll. They had already set up their election “war room”, having finalised a detailed seating plan at the party’s Millbank headquarters – ironically the same building that Labour used in 1997 – with room for 148 staff.

Cameron and his shadow cabinet certainly looked “up for it” when they met in Blackpool last week for their annual conference. They had allocated roles to each member of the team, where they were going and who would be the “front men” to convey the message on television and radio. One shadow minister said: “We all know what we have to do. Our ‘star turns’ will be George Osborne, William Hague and, of course, David Cameron.”

Hague, the former party leader who was crushed by Blair in 2001, planned to tour the country’s marginal seats in a helicopter. He was so chipper last week that he even joked to friends that he might hire the famous “Prescott Express” tour bus. The old Labour stalwart, who will stand down as an MP at the next election, will no longer need it.

The Tory manifesto was ready, too. For 18 months, six policy groups have been working up suggestions for Cameron. By the beginning of last week, Cameron and Osborne had decided which ones to junk and which ones to keep. Raising the threshold of inheritance tax to £1m was key. And, as Brown’s aides acknowledge, the pledge went down extremely well with voters in the marginal seats.

“In a funny way, I think we are more prepared than Labour,” said a shadow cabinet member. “During the summer we were the guys on the back foot and so we knew we had to get all our ideas in shape by the time of the party conference – and bloody fast.”

The Conservatives seemed to be uncommonly united last week. The smell of a general election in the air and an unexpected bonus in the “spin” row over Brown’s announcement of troop withdrawals in Iraq, as well as the “second opening” of a new hospital, had put them in a determined mood.

It was also felt that Labour blows aimed at their proposals relating to inheritance tax and nondomiciled individuals had failed to hit their target.

Perhaps the most troubling aspect for Brown about the Tories’ resurgence was the “Ashcroft factor”. At both the Labour and Conservative conferences, a frequent topic of conversation was just how much influence the wealthy Conservative peer could have on an election.

Ashcroft is reported to be personally sponsoring more than 100 Conservative candidates with donations to local parties ranging from between £20,000 and £40,000, depending on the winnability of the seat or the sellability of the candidate.

Local parties are reportedly judged by his team on the intensity of their campaigning and the funding is allocated accordingly.

One Conservative candidate described just how much of a difference the money has made to him. “I pity the bugger I’m up against, as pound for pound he will be blown off the park,” he said.

The mere mention of the “Ashcroft money” sends a chill down the spine of Labour MPs in marginal seats, as well as Brown and members of his cabinet.

Those close to Ashcroft point to his ability to focus on a problem and keep working on it until it is resolved. At the last general election in 2005 the Conservatives gained 33 seats. Ashcroft gave extra funding to 25 of them. It was suggested at the time that Michael Howard, the then Tory leader, did not fully appreciate the capabilities of the Ashcroft machine.

This time Cameron has no such doubts. Of the 116 seats that the Tory peer is actively funding, aides confidently predict that more than half of them will be converted into Conservative gains. This would be a serious problem for Brown and could mean a hung parliament.

Brown’s advisers had been taking soundings from the marginals which indicated that the effect of the Ashcroft money was growing.

One Labour activist said: “MPs in marginal seats recognised that we just hadn’t got the money to fight the Tories, who had had so much money pumped into campaigning over the past few months. The Tories have been outspending us three to one and the leadership knows it.”

Combined with Greenberg’s polling data, it became apparent that going to the country was becoming an unacceptable risk. Even if he won, Brown could lose political capital. If he had got a majority of less than the 66 that Blair had achieved in 2005, or even if he had got 15 seats more, some MPs would have been arguing on November 2 that this was not enough.

Some of them – including Jacqui Smith and Ruth Kelly, the cabinet ministers who hold small majorities in their seats – might not even have been around in the Commons to complain.

The prime minister would, in the eyes of many MPs, have been weakened and subject to Tory taunts that he was a “lame duck” prime minister, just like Blair had been.

Crucial to Greenberg’s analysis was the uncertainty of what would happen in the marginal seats, such as the redrawn Gillingham and Rainham, where Labour’s Paul Clark has a notional majority of just 15. The pollster could not predict what would happen.

These seats were highly significant in the three elections that Blair won. In 1997 and 2001 Labour made big gains in constituencies around London and the southeast. Commentators at the last election predicted that many Labour majorities would be wiped out. But some survived. And at the end of last week many of those MPs were counselling against an early poll.

Speaking before Brown’s decision was made public, Stephen Ladyman, the former transport minister and MP for Thanet South, said he thought a late poll was in the party’s interest.

“If we wait, I think as soon as we go past Christmas we will see the Tories start to tear themselves apart wanting Cameron to go back to the right,” Ladyman said. “I think if we leave the election to 2009, they will implode.”

It is a thought to which the Labour party leadership will now cling desperately. YESTERDAY, in contrast to the relaxed day that he had anticipated, Brown was faced with a flurry of criticism about his decision. As night fell he left Downing Street apparently for Chequers, his country retreat in Buckinghamshire, where he might find some relative peace.

As news of his decision broke in mid-afternoon, the air-waves became crowded with both Tory and Labour politicians criticising his decision. Cameron spoke of a “humiliating retreat” and Brown’s desire to “cling to office”, charges that the rest of his party will echo in the weeks and months to come.

“The reason the prime minister has cancelled this election is because the Conservative party is making the arguments about the changes this country needs and people are responding very positively to our proposals,” he said.

Sir Menzies Campbell, the Liberal Democrat leader, joined in the criticism. “He could have prevented needless speculation by making this announcement a long before now,” he said. “Gordon Brown has been acting in the interests of the Labour party and not in the interests of the country.”

Some of Brown’s colleagues were disputing that accusation last night. To add to the protestations of loyalists that the right decision had been made, there was some “friendly fire” from the Labour back benches with the beginnings of the blame game. A number criticised the influence of the “young turks” surrounding the prime minister who had pushed him towards an election.

“After weeks of political game-playing by the inexperienced testosterone-fuelled young men in Brown’s team, we have presented the Tories with an open goal, making a Labour leader look weak and reassociating the party with spin,” said John McDonnell, the MP for Hayes and Harlington.

“The incompetent handling of the past few weeks has squandered the goodwill the people of this country felt towards Labour as the result of Tony Blair going. It is time to get back to serving the people and governing the country.”

His criticism was echoed by David Winnick, MP for Walsall North. “Some pretty senior young individuals in and around the cabinet should share the responsibility for talking up an election and referring publicly to where the risk lies,” he said.

The fear is that Brown will be permanently tarred with the tags of being a “ditherer” and a “bottler”. Critics will point to the fact that long ago he wavered over standing as an MP, waiting until a seat with a copper-bottomed Labour majority came up. He prevaricated over standing against Blair for the Labour leadership. And now he has wimped out of a contest that he was sure to win, albeit with an uncertain majority.

Speaking on Radio 4’s Today programme earlier this week, Peter Kilfoyle, the Labour MP for Liverpool Walton, had said: “He’s a man who is very unsure when faced with a big decision. That’s a weakness in politics in general let alone when you are the PM. He wants everything to be tied up 110%. Sometimes you have to go with your instinct and that’s assuming your instinct is well informed.”

It is a charge that the prime minister’s camp will have to shake off before it contaminates the “Brown brand”.

Putting a positive spin on the announcement, his advisers are insisting that they are relieved because it will end all speculation of an early election. “We’re not having any more of this,” said one.

Insiders suggest that a spring poll next year is highly unlikely, as it will take time for the political dust to settle. April 2009 is a far likelier option because Brown will not want to be pushed into calling an election in the final year of his term.

By 2009 a lot of political water will have passed under Westminster Bridge. But whenever and whatever the result, there is little doubt that the first battle in that campaign has already been won by the Tories. With his indecision and “bottling” out of a snap poll, Brown has handed Cameron the mantle of a winner.

Additional reporting: Steven Swinford, Holly Watt, Chris Gourlay

A marginal decision

Opinion polls in marginal constituencies were a key factor in Gordon Brown’s decision to rule out a snap election next month. Late last week voters in three Labour-held marginals expressed the kind of opinions that explains the recent volatility in the polls. Dartford is one of the Kent “super-marginals” that have tiny minorities; Redditch is the Midlands seat of the home secretary Jacqui Smith; and Kingswood, in the Bristol suburbs, would require a swing of about 7% to go Tory, which, if replicated nationally, would give them an overall majority

Dartford: 2005 majority 706

Emma Heath, 34, publisher “I haven’t decided who to vote for yet. I don’t trust any of them. If Cameron was to get my vote he’d have to toughen up on law and order”

Kelly Hunter, 35, retail manager “I preferred Tony Blair to Gordon Brown. He’s got some good policies but I don’t like him personally – he’s pompous, whereas Tony Blair had charisma. I prefer David Cameron to Gordon Brown, but I’m a Labour supporter”

Sandra Bennett, 43, performance analyst “The Conservatives are most likely to get my vote if they reduce tax and put more money into healthcare, I’d like to see more police on the streets too”

Redditch: 2005 majority 2,716

Steve Lawson, 44, retail manager “I have voted Labour in the past but David Cameron won my vote by increasing the inheritance tax threshold. This is something which is completely overlooked by Labour”

Sheryl Evitts, 45, teaching assistant “I have always voted Labour in the past. I’m not sure if I am ready to trust the Tories yet, but I would defi nitely consider giving them my vote”

Delia Simon, 47, sales worker “I would still vote Labour but only because there is no one else better at the moment. I’m not convinced by Brown or Cameron. I might not even vote at all”

Kingswood: 2005 majority: 7,867

Dawn Pashley, 28, lending adviser “I’m in two minds [about who to vote for], but as soon as I hear that there will be an election I will research the policies fully and decide who deserves my vote”

David Thorne, 33, store supervisor “At the moment I’m fl oating – I was with Labour, but Gordon Brown remains unproven. Cameron is a good prospect – he is confi dent and seems to know where he wants to go and in which direction to take us”

Mary Rogers, 72, retired bank worker “I will make up my mind when I have heard all the leaders speak but at the moment I would like to give Cameron a chance. He’s a bit of young blood and we need a young leader”

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