Darling must move fast on tax package or Brown will drown

Alistair Darling, the Chancellor, is under renewed pressure to get the tax compensation package out by as early as Tuesday to give Labour a chance of holding on to Crewe and Nantwich in the by-election on May 22.

Labour MPs have warned Brown and the party whips that anger over the increase in taxation on the low-paid, brought about by the abolition of the 10p lower tax band, is killing Labour on the doorsteps in the by-election and across the Labour marginals. The only chance they have of turning the situation around is to produce a compensation package.

Typically, Gordon Brown is dithering, insisting it has to be 'right'. But his ministerial allies in the Cabinet, including Ed Balls, Yvette Cooper and Hazel Blears, are adamant something has to be announced quickly. Darling gives the impression of being unflappable. They think it's time he flapped a bit.

Meanwhile Alan Johnson produced a new line of defence for Brown this morning after Frank Field said the PM would be forced out before the next election. Johnson hit back by saying Brown is the victim of concerted "character assassination" by the media. This would normally sound like whingeing, but coming after the tidal wave of memoirs by Lord Levy, John Prescott and Cherie Blair at the weekend, it might just work.

Extracts from the books - it was "inconceivable he did not know about the loans" (Levy); he was "rattling the keys" for Number Ten over Tony Blair (Mrs Blair); and he was "annoying, frustrating, prickly, but could blow up like a volcano" (Prescott) - have reinforced the stories of a PM with deep psychological flaws.

Labour MPs are seething with all three for cashing in on their memoirs. We can expect reports of a backlash among Labour MPs, and when Brown publishes the draft Queen's Speech on Wednesday it will be presented as yet another fight-back.

Deep inside the Brown Bunker, his advisors are hoping the public abuse heaped on Brown will convert into people feeling sorry for him, and the drowning man will be thrown a lifeline. But on the other hand, Frank Field could be right: Brown may just be drowning.

THE MOLE: PM UNDER SIEGE

FIRST POSTED MAY 12, 2008