Memo reveals PM's pact with Brown

The secret agreement which gave Gordon Brown complete power over the economy and ultimately the euro decision was revealed today.

A written text of the pact, sealed over dinner at Islington's Granita restaurant in 1994, disclosed that the Chancellor argued over the wording in order to strengthen his control over economic decisions.

The dinner is where Mr Brown negotiated the terms under which he would stand aside in the Labour leadership contest after John Smith's death.

For years there have been rumours that he insisted on a written agreement setting out his authority so that Mr Blair could not wriggle out of it later.

Today, for the first time, someone leaked a text outlining the terms to the Guardian.

The leaked draft reveals that one phrase was scribbled out by Mr Brown. He erased the words, "Tony is in full agreement with this" and hand-wrote in his distinctive heavy scrawl the words "has guaranteed this will be pursued".

This key amendment strengthened Mr Brown's position by making clear the future Prime Minister had ceded authority over Labour's so-called "fairness agenda" of economic and social reforms.

In government, Mr Brown has exploited the power to the full, extending his tentacles from the Treasury to take over satellite departments including Work and Pensions.

The document also promises that Mr Brown's policy ideas would become the centrepiece of Labour's 1997 manifesto - and bedrock of its policies in government.

The memo was drawn up by Peter Mandelson, the former Northern Ireland Secretary. It was intended for ciurculation among aides and press officers to set out a line for briefing the media on the broad terms of the Blair-Brown deal.

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