As Gordon Brown left the Treasury on Friday he cursed the Liberal Democrats with a passion. “Bloody hypocrites,” he swore at an aide.

The Lib Dems had just won the Dunfermline and West Fife by-election, partly by stabbing Labour in the back. With exquisite duplicity they had blamed Labour for controversial new road tolls, which the Lib Dems knew had no chance of being introduced.

So Brown was seething as he caught a plane to Moscow for a G8 meeting and began correcting a keynote speech on terrorism, due tomorrow, which he hopes will restore his image as the prime-minister-in-waiting. He could have been forgiven for thinking that, even if the knives were not at his own back, his hopes of succeeding Tony Blair had received a punch in the eye.

For this morning he will be answering questions on television on whether he is fit to succeed Blair if Labour cannot win a by-election in his own back yard. On another channel Charles Clarke, the home secretary, will be warning that a smooth transition to Brown is not guaranteed and a proper leadership contest is likely — while acknowledging that the chancellor is now effectively jointly running the country with Blair.

But there is only one thing worse for an aspiring prime minister than to be seen as a dour old curmudgeon with an obsessive interest in the minutiae of tax, and that’s to be seen as a dour old curmudgeon who loses open-goal by-elections.

The Lib Dem win in the Scottish constituency the chancellor calls home (his own constituency is next door) was startling. Despite sex scandals and the lack of a leader, the Lib Dems overturned a Labour majority of 11,500.

Brown’s allies say that “by-elections are by-elections”, that they imply nothing of national significance. But his enemies were gleeful. “People are bound to wonder how, if Gordon is not in touch with people in his own back yard, he will get the message over to middle England,” said one.

IT SHOULD have been so different. According to Labour’s “grid”, grumpy Gordon, once described by Downing Street as “psychologically flawed”, should have been well on his way to becoming a smiley man of the people by now.

With the help of Brown’s wife Sarah, a former public relations executive, and other advisers, a complete overhaul of the chancellor’s image has been under way for weeks. “Project Gordon” has been running since early January with the aim of presenting Brown as a well-rounded man of the world, a father of a young child, who cares about Britishness, the poor of Africa and God.

Alastair Campbell and Philip Gould, Blair’s personal pollster, have been attending fortnightly strategy meetings in Downing Street, with aides talking about a new rapprochement between Blair and Brown over a smooth transition of power. The chancellor has been invited by Blair to attend, along with some of the chancellor’s inner circle, including Ed Balls, Ed Miliband and Spencer Livermore. The aim is serious: to work out how Labour should meet the challenge of David Cameron, the young Tory leader.

Those who attend the meetings implicitly accept that a key purpose is to make Brown the “candidate of continuity and change” against the “flip-flops” of Cameron.

Brown felt relaxed enough to joke last week about his new “image consultants”. On a trip to Birmingham he asked aides playfully: “Does my tie look right? Where’s Alastair and Philip? I need to know if it goes with this shirt.”

Gould’s private polling and focus groups show Brown is much more trusted than Blair, especially since the Iraq war. What he needs is a cosier, more rounded image.

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