Labour adviser slates party's `deceit'

Tony Blair, the Labour leader, yesterday proved unable to shake off suggestions of tensions between him and his deputy, John Prescott, as it emerged that Mr Prescott had not been invited to a secret campaign strategy meeting.

Mr Blair also comes under attack today from a former Labour adviser who condemns the party's economic policy as "a great deceit on the British public" and describes the details of plans to modernise the welfare state as "an idea-free zone".

The campaign meeting, held at the country house of Chris Powell, brother of Mr Blair's chief of staff, Jonathan, was held to discuss campaigning on economic policy and preparations for the general election - subjects regarded by Mr Prescott as part of his brief.

Mr Prescott was understood yesterday to be unhappy at being "frozen out" of the session in March.

The news of the meeting comes in the wake of last week's leak of an adviser's memo warning that the party did not have a programme that would "sustain Labour in government". Mr Prescott complained that the memo had not been sent to him.

Mr Prescott will draw attention to differences with Mr Blair over regional policy on Wednesday when he launches a book written by an ally which calls for directly-elected regional assemblies in England - a policy dropped by Mr Blair.

In a further embarrassment for Mr Blair, today's edition of the left- wing magazine Red Pepper carries an article by Dr John Wells, a Keynesian economist at Cambridge University and Labour member. "The leadership's basic framework is acceptance of the dominance of the economy by private capital - the `mixed' economy having virtually disappeared through privatisation," he says.

He accuses the shadow Chancellor, Gordon Brown, of "opportunism" in trying to "fish in the troubled waters between the Chancellor and the Governor of the Bank of England over interest-rate policy".

Dr Wells, who was Margaret Beckett's main economic adviser before the last election, was a relatively minor member of a circle of Labour-advising academic economists, but his criticisms articulate wider unhappiness throughout the party over economic policy.

He attacks Mr Brown's claim that Labour's emergency job-creation programme can be paid for "at no net cost to the taxpayer and within existing budgets".

And he says Labour's refusal to set out the principles of a more redistributive tax system is "simply dishonest". He argues for higher taxes to pay for public investment.

Mr Brown's office refused to comment, but it is understood that the shadow Chancellor has privately expressed satisfaction that what an aide called a "quite fundamental and radical shift to a modern economic policy" has been achieved with so little internal dissent.

Dr Wells's comments are likely to overshadow the launch today of Mr Blair's nationwide "business tour" to sell Labour economic policy to companies and City institutions.