Labour donations fall over fears Blair will quit

Labour is suffering a serious fall in high-value donations because of rumours that Tony Blair is planning to quit.

Party fundraisers have begun an urgent campaign to convince benefactors the Prime Minister is staying on - and that he has no intention of handing the reins to Chancellor Gordon Brown.

A close ally of Mr Blair revealed many financial backers were antagonistic towards a Brown premiership and had threatened to stop writing cheques.

"Some major donors have said they will not give large sums if there is any question of Gordon taking over and spending their money," the source said.

"A few said they would stop giving completely if he became Prime Minister and have asked for assurances that Tony Blair will not retire.

"The serious money is very much tied to people's admiration for Blair as a leader and statesman, especially in the business world."

Among businessmen regarded as personal supporters of Mr Blair are computer mogul Sir Alan Sugar and businessman Sir Maurice Hatter, although neither is said to have threatened to stop giving. One Brown supporterat Westminster dismissed the candid admission as "nonsense", saying the Chancellor's stewardship of the economy was the keystone of Labour support from business.

Some at No10 have been infuriated by rumours, believed to originate at the Treasury, that the pair have reached a pact under which Mr Blair will stand down. Last month Mr Brown fuelled the rumours by saying the question of whether Mr Blair stayed on to the next election was "a matter for him".

Weeks earlier, Mr Blair used his New Year message to hint he intended to stay at Downing Street for several more years. Now the message being passed to donors is that Mr Blair will definitely be Prime Minister until the next general election, but no commitment is being given as to how long he would stay on after that.

"Tony is absolutely determined to win a third general election victory," said his ally. "How long he remains Prime Minister after that is a much more difficult question."