If Mr Miliband does not stand, Mr Reid is even prepared to fight the Chancellor himself as a "last resort", friends have disclosed.

The revelations are a huge setback for Mr Brown's hopes of taking over from Tony Blair, almost certainly at the end of June, as smoothly as possible.

They also offer the starkest evidence of the seriousness of the split between the Chancellor and Cabinet ministers who want to preserve the Prime Minister's political legacy.