Gordon Brown finally came clean on his ambition to be Britain's next Prime Minister today, only to see a painstakingly-constructed speech at the Labour Party conference upstaged by a row over a reported aside by Cherie Blair.

The Prime Minister's wife was not even in the main hall at Manchester's G-MEX centre when the Chancellor stood up for what had been widely billed as the most important speech of his career.

In it, he lavished praise on Tony Blair and tried to explain the origins of his own political philosophy and values before telling delegates that he would "relish the opportunity" to take on David Cameron and the Conservatives.

But, according to a report on the Bloomberg news agency, Mrs Blair heard the beginning of Mr Brown's speech as she was on the way out of the conference centre and took exception when he described how he felt privileged to have worked so closely with "the most successful Labour Prime Minister". "Well, that's a lie," she was said to have exclaimed.

The remark was flashed across Bloomberg boxes in dealing rooms around the world even as Mr Brown received a lengthy standing ovation from the party, with Mr Blair joining in from the platform.

Downing Street was forced into damage-limitation mode, flatly denying that she had ever made the comment and complaining that neither of her two bodyguards had heard her say anything.

Bloomberg, a financial news agency founded by the New York mayor Michael Bloomberg, stuck to its guns. "We stand by our story," a spokeswoman said.

Cherie Blair tonight personally denied the Bloomberg report. "Honestly, guys, I hate to spoil your story, but I didn’t say it and I don’t believe it either," she told reporters.

Whatever the truth, the row was testimony to the fact that despite the public show of unity Labour heads into its leadership contest riven by divisions that Mr Brown will have to handle carefully.

It will also detract from the message Mr Brown gave to delegates today: that as the real heir to Mr Blair he would lead a Labour Party with a reforming social agenda and economic stability.

Mr Brown had angered many senior figures in the party by remaining silent during a parliamentary rebellion against Mr Blair's leadership earlier this month and the subsequent revelation that he had met one of the plotters at his home in Scotland further damaged his reputation.

That rebellion did, however, force Mr Blair to announce that this party conference would be his last as leader, freeing up Mr Brown to start talking openly of his own leadership ambitions. Newspaper reports suggested that he had worked on his speech for weeks, getting up early to work through various drafts.

Predictably enough, Mr Brown started off with a lengthy and almost embarrassingly extravagant tribute to all aspects of Mr Blair's premiership, although he shocked delegates by admitting to past differences and expressing regret that at times they had "distracted from what matters."

He then began to lay out his own leadership stall, promising the British people a "deal for the next decade" around a renewed and reforming Labour agenda "founded on responsibilities as well as rights".

He also spoke about how his own personal and political values had been informed by his family background. His father had been a minister of the church whose motivation was "not theological zeal but compassion" and an inspiring figure who had told him, 'You can leave your mark on the world for good or ill.'"

"As a quite private person, what drew me into politics was not a search for fame or headlines but a determination to make a difference," Mr Brown added. "If I thought the future of politics was just about celebrity and not about something more substantial, I wouldn't be in politics.

"If being in public life becomes about image above all else, then I don't believe politics would be serving the public. It will not surprise you to learn that I'm more interested in the future of the Arctic circle than the future of the Arctic Monkeys.

"Some see politics as spectacle. I see politics as service because it is through service that you can make a difference and you can help change people's lives. I know where I come from, what I believe and what I can contribute. And I am confident that my experience and values gives me the strength to take the tough decisions.

To sustained applause from delegates, he added: "I would relish the opportunity to take on David Cameron and the Conservative Party."

Despite the acres of newsprint already expended on the subject, it was the first time that Mr Brown had publicly confirmed his intention to stand in the contest to replace Mr Blair and brought a wide grin from the Prime Minister, who was watching from the platform beside him.

It also appeared to be exactly what the party itself wanted to hear - although delegates are well aware of recent opinion polls showing the lack of voter enthusiasm for a Brown premiership.

The Chancellor was also at pains to make clear that his government would be a government of all the talents, carefully name-checking all those seen as potential leadership challengers, including John Reid, Alan Johnson and David Miliband.

Charlie Whelan, the Chancellor's former spin doctor, said: "If anybody had thought about standing against Gordon Brown for the leadership they will have second thoughts now... Gordon Brown is the man who will replace Tony Blair as Prime Minister."

Mr Brown rounded off his speech with a call for unity behind a vision of "a Britain where were can do better than we are" before delegates, joined by Mr Blair and John Prescott, the Deputy Prime Minister, stood up to give the Chancellor an ovation.

By that time, Mrs Blair had already left the building.

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