Fresh signs of indiscipline and tension at the highest levels of Government emerged yesterday with reports of a bust-up between Ed Balls and Jack Straw.

An extraordinary account suggesting that Mr Straw, the Justice Secretary, threatened to punch Mr Balls, the Children’s Secretary, highlighted the tension between two key allies of the Prime Minister.

According to one account, Mr Straw came back to his department fuming that he had never been spoken to so rudely by a colleague in public and that he was not going to put up with it.

Sources close to Mr Balls and Mr Straw claim the report related to a meeting about youth justice that took place in September, and strongly denied the suggestions.

However, The Times understands there was also tension between the pair earlier this year over who should chair the Youth Justice Board. The board was created by Mr Straw, who wanted to ensure that the chairman had credibility in the criminal justice world.

Mr Balls has been accused of having an abrasive personality, particularly in dealings with colleagues, and last week was photographed in a playground, which appeared to some to be an attempt to soften his image.

The report is the latest in a string of arguments and rivalries around Government to be made public. The Prime Minister was said to be embarrassed by stories about tensions inside No 10 after the arrival of Stephen Carter as Mr Brown’s head of strategy.

Mr Brown is also under pressure from some Labour MPs to soften his image. At last week’s meeting of the Parliamentary Labour Party, Chris Mole, the MP for Ipswich, told the Prime Minister: “People don’t know who you are.”

Downing Street responded yesterday by inviting cameras in to see Mr Brown meeting George Clooney, the Hollywood star – the latest stage in a makeover that included his addressing the Scottish Labour conference without notes. However, last night there were more signs of tension among Mr Brown’s ministers in the Lords. Baroness Ashton of Upholland, the Leader of the Upper House, is said to be barely on speaking terms with Baroness Scotland of Asthal, the Attorney-General.

Lady Ashton is said to have taken offence when Lady Scotland, who is black, leant over to an Asian lobbyist at a meeting on forced marriages and said: “Don’t worry, these white people don’t really understand what we have to go through.”

Last night the Attorney-General’s office denied that she made the comment, adding: “The nature of this comment could be regarded as offensive. She has a close working relationship with Lady Ashton.”

Relations have been bad for some time among some ministers in the Lords, where Labour peers are unhappy about plans to reform the chamber and frequently face defeat by opposition and crossbench peers. Lady Ashton has had difficult relationships with her deputy, Lord Rooker, and Lord Grocott, the Government’s former Chief Whip in the Lords.

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