Tony Blair has been forced to deny a claim by one his closest allies that he believes Gordon Brown “could never beat” David Cameron at the polls.

According to Lord Levy, Mr Blair's chief fundraiser and one-time Middle East envoy, the former prime minister also considers his Chancellor and successor in Number 10 as a “liar”.

His comments came in the peer's memoirs, serialised in the Mail on Sunday, and were categorically denied by Mr Blair's spokesman.

Lord Levy is best known as Labour's "Lord Cashpoint" and came under scrutiny in Scotland Yard "cash-for-peerages" investigation, at the end of which prosecutors decided that no charges should be brought. He wrote in his memoris that Mr Blair “told me on a number of occasions he was convinced Gordon ’could never beat Cameron’”. He said the former premier felt he could have won a fourth term had he not stood down last summer.

“But Gordon? ’He can’t defeat Cameron,’ Tony told me. Blair believed Cameron had major strengths - political timing, a winning personality and a natural ability to communicate to Middle England that Gordon would be unable to match,” he added.

Mr Blair’s spokesman said: “Tony Blair doesn’t agree with the views attributed to him by Lord Levy and fully believes Labour with Gordon Brown’s leadership can win the next election.

“Tony Blair said when he stood down that he would be 100-per cent loyal to Gordon Brown and that continues to be the case.”

Lord Levy’s claims heap further pressure on the Prime Minister as he struggles to maintain his authority amid Labour rebellions over taxation and the detention of terrorist suspects.

He said that Mr Blair felt Mr Brown was behind an attempt by Labour MPs in 2006 to oust him from Downing Street and the Labour Treasurer Jack Dromey’s claim that he had been kept in the dark about the secret loans that led to the “cash-for-honours” inquiry.

“He kept saying he had never realised how duplicitous Gordon was - and what a ’liar’,” Lord Levy wrote. “I never assumed - Tony certainly never did - that it was about Jack Dromey. It was about Gordon Brown.”

Lord Levy, who as Mr Blair’s chief fundraiser was at the centre of the cash-for-honours probe, claimed the ex-premier also knew all the Labour lenders and donors and decided who got peerages.

Mr Brown knew about the loans as well, he said, and criticised the Prime Minister’s leadership himself.

“There are people who are great number twos but when thrust into the leadership role they cannot cut the ice,” he said. “Gordon Brown has not cut the ice.”

Lord Levy’s intervention comes at a criticial moment for Mr Brown as he faces his first electoral test in the local and London mayoral elections on Thursday.

As he sought to limit the damage to Labour from the 10p tax row, Mr Brown promised tonight he would always be “ready to listen”.

Amid predictions of a backlash at the polls in Thursday’s local elections, the Prime Minister insisted it was Tory and Liberal Democrat councils that were letting down “hard-working families”.

In an article for the Sunday Mirror, Mr Brown said: “Whatever the differences and debates of the past week, I know every member of the Labour Party will be working flat out over the next few days to bring this choice alive to people, and show them why it is vital to get out and vote Labour on Thursday.

“And just as we showed them last week in relation to the 10p tax rate and the support we give to pensioners and workers on low incomes, Labour is always ready to listen to people’s concerns, and take action on them.”

Mr Brown was forced to offer concessions on Wednesday as he faced a major Commons defeat at the hands of Labour rebels over tax changes which would hurt millions of low earners.

The Sunday Times reported today that Mr Brown is also preparing a U-turn over the Government’s controversial proposals to hold terror suspects for 42 days without charge. The Prime Minister is facing defeat in the Commons as dozens of Labour MPs prepare to rebel over the plans.

But the newspaper said a leaked document showed Jacqui Smith, the Home Secretary, had drawn up concessions including “alternatives to detention” after the current 28-day cut-off.

Suspects would spend the last 14 days tagged or under house arrest, the paper said.

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