Cabinet rivalries led to Brown's defeat over Gurkhas, claims Keith Vaz

Cabinet infighting was today blamed for the Government's humiliating defeat over the Gurkhas.

Fresh concern that government discipline is falling apart was raised by claims that a clash between Jacqui Smith and John Hutton unwittingly allowed the Gurkha row to spiral into a full-blown fiasco.

The finger of blame was pointed by former minister Keith Vaz, now chairman of the all-party home affairs committee, as Labour MPs grow increasingly worried that Gordon Brown's authority is being weakened by a series of blunders and defeats.

"I felt that the whole issue was mishandled," Mr Vaz wrote in an article for the Blairite think tank Progress.

"Whatever in-fighting occurred between the Home Office and the Ministry of Defence caused chaos which resulted in the Government being defeated."

He accused Home Secretary Ms Smith of failing to deal properly with the row over settlement rights for the former soldiers.

But Labour MPs who rebelled against the Government have also accused Defence Secretary Mr Hutton and Chancellor Alistair Darling of resisting moves by the Home Office to draw up more lenient settlement regulations for former Gurkhas, a claim denied by the Treasury. Ms Smith's allies also say that she warned Chief Whip Nick Brown that the Government was heading for defeat. Mr Vaz, who backed the Liberal Democrats last week in a Commons showdown on the issue, insisted it was "not a vote against Gordon Brown" but for a change of policy to give the ex-soldiers justice.

He said that he wrote to the Home Secretary last November, arguing that all former Gurkhas should be allowed to settle in the UK, but only received a reply on 24 April when the Government's new policy restricting such rights was announced.

"This issue should have been much higher on the Home Office priority list given the public and parliamentary concern," he added.

Ms Smith and Communities Secretary Hazel Blears, who criticised an appearance by the Prime Minister on YouTube, are facing demotion in a reshuffle expected after the 4 June European and local elections.

Labour is set to suffer painful losses at the polls, with one expert predicting a fall of 150 in its number of town hall seats.

A source close to the Home Secretary branded the talk of her being moved from her current post as "Westminster tittle tattle", adding: "It's a decision for the Prime Minister. She is getting on with the job. All sorts of rumours go around. It's not long ago that Jacqui was being tipped as the next leader."

Downing Street sources today said that the Prime Minister had "full confidence" in Ms Smith and Ms Blears.