GORDON BROWN’S reshuffle has created a bitter rift between his two most powerful lieutenants, threatening to derail attempts to rebuild his shattered government.

A Downing Street insider claims that Ed Balls “went nuclear” as the prime minister wavered over whether to make him chancellor – and threatened to stop cooperating with Lord Mandelson.

The schools secretary, whose hopes of being moved into No 11 were torpedoed when James Purnell, the work and pensions secretary, resigned, is said to suspect the business secretary of deliberately undermining his chances of getting the job.

The episode has fractured the truce between Balls and Mandelson, who had been bitter political rivals but patched up their differences when Mandelson returned to the cabinet last autumn.

The new crisis in their relationship highlights the fragile state of Brown’s hastily constructed cabinet as he faces disastrous election results in the European polls, due to be announced tonight. Labour is braced for its worst performance in a ballot for the Brussels parliament.

An ICM poll for the News of the World last night showed that seven cabinet ministers face the loss of their seats in a general election.

Last night Balls described

claims of a rift with Mandelson as a “fabrication”, claiming he was the victim of a smear campaign. “Whoever is inventing this rubbish is trying, through lies and malicious fabrication, to undermine the Labour party and the Labour government. Nobody should believe a word of it,” his spokesman said.

It comes as two more female ministers consider resigning amid disillusion over Brown’s leadership.

Meanwhile, Caroline Flint, the former minister of state for Europe, has launched a new attack on the prime minister.

In an excoriating article for The Sunday Times, Flint, who resigned on Friday, lashes out at the chauvinism of the No 10 cabal, accusing Brown of “utter hypocrisy”.

“In my relationship with the prime minister, I have felt that I had to repeatedly prove my loyalty while being prejudged,” she says.

She claims women politicians have to “constantly work and work to prove their worth” and accuses allies of the prime minister of briefing against her and her female colleagues, adding despairingly: “Why they act like this I don’t know.”

Last night there were signs that the revolt by women ministers was widening. Bridget Prentice, the justice minister, and Jane Kennedy, the environment minister, are understood to be considering their futures.

Kennedy said: “After the drubbing we have just had at the elections, I would be amazed if there was a single member of parliament [who was not] talking to their local party to judge what the feeling is in the party.”

Five senior ministers – Continued on page 2 Continued from page 1 Jacqui Smith, the former home secretary; John Hutton, the former defence secretary; Hazel Blears, the former communities secretary; Purnell and Flint – have already resigned, three over Brown’s leadership, in the greatest crisis of his premiership.

The Sunday Times has learnt that as the future of Alistair Darling, the chancellor, hung in the balance, a succession of cabinet ministers and backbenchers lobbied the prime minister to keep him in his post, leaving Brown fearing more resignations if he pressed ahead with his plan to promote Balls.

Balls immediately agreed to remain as schools secretary when Purnell announced his resignation, privately acknowledging that Brown could no longer afford to risk ousting Darling.

However, a Downing Street insider claims that Balls confronted Brown earlier in the week, as he agonised over whether to give him the chancellor’s job, warning the prime minister that he could cease to cooperate with Mandelson if the long-standing plan to move him to the Treasury was abandoned.

“Ed thinks Mandelson ran a covert campaign to stop him. He thinks Peter advised Darling on how to handle everything. He went nuclear and warned Gordon that if he didn’t get the job he wouldn’t cooperate with Peter any more,” the insider said.

The Sunday Times understands that it is not the first time Balls has privately made such a threat. However, despite the latent mistrust between them, the pair have worked closely and effectively together since Mandelson’s return. They were both at Brown’s side when Purnell resigned and, despite Balls’s threat, were both closely involved in Friday’s reshuffle.

No 10 fiercely denied a rift, saying suggestions of “any tension” between the two men were “completely untrue”. The denial was echoed by a spokesman for Mandelson.

The prime minister is expected to face a stormy meeting of Labour backbenchers tomorrow as rebel leaders continue their quest to collect the 72 names required to trigger a leadership ballot. Meanwhile, there was growing fury at a Brownite smear operation designed to undermine the credibility of critics of the prime minister.

Nick Brown, the chief whip, was yesterday forced to issue a public apology to Alan Milburn, the Blairite former health secretary, after branding him a plotter. Brown had briefed Milburn’s local newspaper that he was “active” in attempts to unseat the prime minister.

However, yesterday the chief whip offered an embarrassing retraction after saying sorry in a telephone conversation with Milburn. “We got our wires crossed and it needs correcting,” said Brown.

A study by Colin Rallings and Michael Thrasher of Plymouth University suggests that Labour is on course to lose 140 seats at the next general election, giving the Conservatives a 34-seat majority.

A new survey of Labour grassroots activists reveals that fewer than half want Brown to lead them into the election. One in five is calling for him to quit now, according to the poll of 800 party members carried out by YouGov for Channel 4 News.

Times Recommends

• Secret files show Thatcher's role in coup plot
• Veterans to boycott Shell after ban on poppy sales
• 'I survived so please let Baby RB live too'