The Chancellor has agreed with Tony Blair to mark his return to the heart of Labour’s election machine with a presentation to the Cabinet on Thursday and by speaking at a policy launch on Friday.

The economic campaign will run for seven to ten days after that, during which time Mr Blair is widely expected to announce that the election will be on May 5. Mr Brown has been speaking to Mr Blair several times a day during the past few days as Labour has capitalised on the public-spending gaffe by Howard Flight, who suggested that the Tories were hiding the true extent of planned cuts.

Mr Blair’s acceptance that Labour should fight the election on the economy and the dividing lines between the main parties has been crucial to persuading Mr Brown to take his place at the heart of the campaign. Aides said that there was no question of Mr Brown replacing Alan Milburn, the party’s election co-ordinator, and that the Chancellor himself had not sought any structural changes so that he could be accommodated.

It is understood that some of Mr Blair’s aides were keen to formalise Mr Brown’s role, but that Mr Blair was unwilling to do anything that undermined Mr Milburn. Mr Brown was said to be relaxed about that.

Mr Milburn will continue to chair the daily election meeting. Mr Brown will also, as advertised, spend more time in the country, campaigning in marginal seats.

Labour MPs and Cabinet ministers have been demanding that Mr Brown be brought back to the centre of the campaign. He was bruised after Mr Blair appeared to put Mr Milburn in charge of the whole election effort at a reshuffle last summer.

Despite Mr Blair’s repeated insistence that the Chancellor would be back, Mr Brown has held out for clarification. He is understood to accept that he will be playing a different role from 1997 and 2001, when he was effectively in daily charge.

However, now he is happy to be taking a central role alongside Mr Blair, John Prescott and Mr Milburn and believes that the storm that has greeted Mr Flight’s remarks has vindicated him in his insistence that Labour’s economic record and the claim that the Tories would cut spending by £35 billion should dominate Labour’s campaign.

Mr Brown has faced some internal criticism from Cabinet ministers for relying so heavily on the £35 billion charge, particularly after its launch went badly on the day after the Budget, but aides say that the disclosures from Mr Flight, and the effect they have had on raising Labour’s morale, justify his original judgment. Some ministers have also accused Mr Brown of “playing hard to get” and criticised him for not appearing at enough Labour economic press conferences.

Yet there has been a general belief that he would want to play as big a role as possible because his personal interests are served by Labour winning the biggest possible majority.

He expects to become Prime Minister if Labour wins and Mr Blair stands down, as promised, during the next Parliament. He would be aiming to keep up Labour’s run in power at the election after the next, probably in 2009. The better Labour does in 2005, the easier it will be for Mr Brown to hold on and win again in 2009.

Mr Brown’s allies say that he is determined to capitalise on the Howard Flight gaffe because he can use it to convince voters that the Tories have a completely different ideological agenda to Labour on the public services.

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