Blair referees Cabinet spending dispute

Tony Blair was today stepping in to referee a serious dispute between Gordon Brown and senior Cabinet ministers over their Whitehall budgets for the next three years.

The Prime Minister scrapped a planned visit to the East Midlands to chair a series of meetings four days ahead of the Chancellor's long-awaited spending announcement.

All sides were keen to play down the rows but the Evening Standard understands the key opponents of Mr Brown are Home Secretary David Blunkett and Defence Secretary-Geoff Hoon. Mr Blunkett is said to be "fighting to the last moment" for extra billions he says he needs for his police reform and criminal justice agendas, and is thought to have pleaded with Mr Blair directly.

Mr Hoon is also protesting that defence must not lose out. The Treasury faced accusations it was preparing to pull out of a deal to buy more than 200 new Eurofighter jets - but Downing Street dismissed such claims as "pre-CSR" tension. In the last few weeks the tensions in Whitehall, which had been high a few months ago, had lessened as Mr Brown prepared to announce his plans in a statement to MPs on Monday.

However, Mr Blair's decision to stay in London and knock heads together is proof enough that ministers' ire has been raised by final details shown to them in recent days.

Mr Brown used April's Budget to jump the gun on health spending and announce a huge £43 billion for the NHS over the next few years. Other departments are still fighting over an extra £20 billion to help fund them from now until 2005-2006.

Education Secretary Estelle Morris has been told that her department will be a big winner while there are also signs that Mr Brown's key ally, new Transport Secretary Alistair Darling, will also be a major beneficiary.

Reports today suggested another, more surprising, winner would be Environment Secretary Margaret Beckett getting £500 million to reform and revive the farming sector.