TONY BLAIR and Gordon Brown appeared determined last night to allow John Prescott to limp on in office, believing that their separate and joint interests are best served by the Deputy Prime Minister staying put.

Mr Blair is likely to be urged by senior backbenchers to ask Mr Prescott again to give up his grace-and-favour Dorneywood residence, where, embarrassingly, he was photographed playing croquet last week after The Times revealed that Mr Blair tried to take the perk away from him in the reshuffle this month.

But Downing Street, the Chancellor’s allies and the Cabinet closed ranks behind the Deputy Prime Minister because they feared that his departure would open another bout of internal turmoil and help the Conservatives.

Mr Blair wants Mr Prescott to remain until he stands down. If Mr Prescott were to go now, it would almost certainly mean a deputy leadership election at the Labour conference this autumn. With several candidates signalling their readiness to enter the ring, Labour would be preoccupied with an election when it needs to be trumpeting its recent policy changes on pensions and education.

The other risk for Mr Blair is that, if there were a deputy contest this year, he could come under pressure to go at the same time and give Labour the chance of a clean start.

Mr Brown wants Mr Prescott to stay because he is seen as the man who can best oversee the transition of leadership over the coming year.

Mr Prescott has been present at private discussions between Mr Blair and Mr Brown when they have discussed options for a handover of power. Mr Brown’s allies say that Mr Prescott will ensure that the will of the parliamentary party for an orderly and peaceful change is enforced.

As some Labour MPs continued to call for Mr Prescott to go, the Deputy Prime Minister let it be known that he intends to stay in office until Mr Blair leaves. His friends confirmed that there was an understanding between them that they would go at the same time.

Many Labour MPs accept Mr Blair’s view that the removal of Mr Prescott now would lead to instability in the party when it can least afford it. However, they feel that Mr Prescott could make a gesture by giving up Dorneywood.

Mr Blair tried to take it from him when he stripped him of his department during the May 4-5 reshuffle, but Mr Prescott dug in his heels and is said to be determined to keep the perk. To give it up would give his critics the green light to keep “chipping away” at him.

Mr Prescott faces claims that his affair with his diary secretary breached his department’s staff handbook. The Tories pointed out that the Office of the Deputy Prime Minister’s rules for employees cautioned against “improper” conduct during work hours. Caroline Spelman, the Tory communities and local government spokeswoman, said: “It comes as no surprise that a man who couldn’t even pay his own council tax bill can’t be bothered to read his own official handbook.

“This just shows that there seems to be one rule for Labour ministers living it up at taxpayers’ expense, and another for everyone else.”

The rules state: “You must not make inappropriate use of official time, information and resources of the office.”

The ministerial code says that ministers have a duty not to ask civil servants to act in breach of the rules.

Ian Gibson, Labour MP for Norwich North, said that Mr Prescott had become a figure of fun. “I don’t think the episodes that have been in the papers over the weekend amount to that much. What matters to the person in the street is what he is doing. What is his job? He has all the fringe benefits and so on yet it’s not clear what his position is. I think that’s what makes people cynical about politics and John perhaps in particular.”

Asked whether Mr Prescott had become a laughing stock, Dr Gibson said: “People do laugh about him because of his goings-on in the last few months or so.”

But Des Browne, the Defence Secretary, insisted that the Deputy Prime Minister was “very valued”. He said: “He’s given a lifetime of service to the party. Without his contribution, among others, we wouldn’t have had three terms of government. That’s why he’s the elected deputy leader.”

Mr Browne added that Mr Prescott continued to play a big role in the Government. He told the BBC: “I know that he’s been damaged by events in his personal life, but those are, in my view, private matters and should remain so. He should be judged by his contribution.”

PERKS OF THE JOB

Salary: £133,997

Properties: Dorneywood, in Buckinghamshire; Admiralty House, London; constituency home in Hull

Ministerial car: Jaguar

Ministerial pension: £1.5 million if he stays in his Cabinet post until 2010

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