Brown and Blair isolate Irvine

LORD Irvine of Lairg, the beleaguered Lord Chancellor, has been left beaten and isolated after a behind-the-scenes battle over the future price and profit regulation of gas, electricity, water, and telecommunications industries.

The Independent has been told that Lord Irvine, who chairs the cabinet committee on future legislation, was standing out against an early Bill to reform regulation of the privatised utilities. But following an intervention by Gordon Brown, Chancellor of the Exchequer - who does not sit on the committee - Lord Irvine was forced into retreat. Some ministers believe his defeat signals a "withdrawal of love" by Tony Blair.

The Treasury and the Department of Trade and Industry had wanted the Regulatory Reform Bill to be included in the Queen's Speech programme for next autumn's session of parliament. But Lord Irvine astonished colleagues by saying that he did not see the Bill as a priority in political terms. His opponents argued that Margaret Beckett, the President of the Board of Trade, had set up an inter-departmental review last July, which was specifically welcomed by the Treasury in the Budget Red Book.

Mrs Beckett said then that 13 years after the Tories had put the first regulatory regime in place, it was time to take stock. She said the review would address concerns about profit levels, service quality, investment shortfalls, "and the social implications of some commercial decisions - particularly for low income and disadvantaged consumers".

The Whitehall review is due to report in the next few weeks - with public consultation due to be completed by the summer.

In cabinet committee wrangling, Lord Irvine is understood to have been told that any delay in legislation would create a loss of momentum and any scandal involving prices, profits, or "fat-cat" executive rewards would immediately be pinned on the Government.

But Lord Irvine obstinately dug in, and it was only after intervention by Mr Brown that he was over-ruled. A Whitehall insider told The Independent last night that the question had been "resolved" to the satisfaction of Lord Irvine's opponents.

That defeat in Cabinet committee comes hot on the heels of the row over the lavish decoration of his official quarters - and numerous disputes with other cabinet colleagues, including Jack Straw, the Home Secretary, and Donald Dewar, the Secretary of State for Scotland. This week's statement on legal aid was also seen as a retreat on earlier plans that provoked outrage in the legal profession.

The Lord Chancellor found himself in even more hot water yesterday, following claims that he misled a Commons committee over the secret talks being held between Labour ministers and Tory leaders on reform of the House of Lords.

Conservative members of the Commons Public Administration Committee accused Lord Irvine of misleading them after he gave the impression on Tuesday that no talks were taking place between the parties over Lords reform.

The Lord Chancellor dismissed the value of such talks in the past, saying: "A muckle lot of good it did them". But on Thursday night, Lord Cranborne, the Tory leader in the Lords, revealed that he had attended two confidential meetings with Lord Richard, Lord Privy Seal and Leader of the Lords.

The Prime Minister's official spokesman last night dismissed the claims as a "Tory get-Irvine" campaign. "There is a world of difference between the sort of soundings that have been made and substantive talks," he said.

Lord Irvine could now face a demand to return to the committee for another grilling, if he fails to satisfy the chairman with his explanations.