Lord Falconer’s pension row deepened last night with reports that he is planning to sue the Prime Minister over his refusal to allow him to claim a six-figure sum.

If the former Lord Chancellor and close friend of Tony Blair does take legal action, it is thought that it will be the first case of its kind to be brought against the Government.

The dispute centres on whether Lord Falconer of Thoroton is entitled to a bigger pension than other former Cabinet ministers because of his position. When he took on the post in 2003, he took the standard £104,386 salary for Cabinet members in the House of Lords, despite being entitled to £232,900. While the Cabinet Office says that his pension entitlement is £52,193, Lord Falconer believes it should be double that.

He is preparing for a courtroom battle after the Prime Minister refused his request. Gordon Brown has taken a firm stance on the issue, with reports that Lord Falconer had a showdown meeting with him in September.

Lord Falconer had been entitled to a higher package than other ministers because he had to give up a lucrative private legal career. He had been earning more than £500,000 a year.

If Mr Brown stands firm against Lord Falconer, Mr Blair’s former flat-mate, the pensions row could open up old wounds between Brownites and Blairites.

Lord Falconer stood down from the Cabinet just before Mr Brown took over in June. In a thinly veiled attack on the Prime Minister last month, Lord Falconer gave a warning that the party needed to spell out an inspiring vision.

The Daily Telegraph reported that Lord Falconer’s case could hinge on a statement that he gave to the House of Lords in 2004, when he said the Lord Chancellor would “retain the current pension and salary arrangements of his office”. The Cabinet Office maintains that his pension should be tied to the salary he took in 2003.

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