Labour won't pay for Britannia

The Queen has been told that a Labour government will not pay for a pounds 60m replacement for the royal yacht Britannia.

The shadow Chancellor, Gordon Brown, has "let it be known" to Buckingham Palace that John Major's promise of public funds will not be honoured if the Opposition wins power.

The party's initial wait-and-see policy on Britannia was ditched on Friday when voter reaction was assessed, and when it became clear that the Government had delayed the announcement to exploit it in the run-up to the general election.

Mr Brown's warning, conveyed "through the usual channels" - believed to be a civil service intermediary - has the full backing of Labour leader Tony Blair.

A spokesman for the shadow Chancellor said: "We are signalling to the Queen that there will be no taxpayers' money going to the royal yacht."

The Queen has not responded, but the Royal Family is known to be divided over thefunding of a replacement for the 40-year-old Britannia.

Prince Charles has told friends that he favours the use of private money. The Duke of Edinburgh, meanwhile, is understood to want a state commitment, and the Queen has deep misgivings about the possibility of private logos on a new yacht.

Labour strategists were at first surprised at the level of public hostility to the use of taxpayers' money. But newspaper polls recorded 20-to- 1 majorities against it, and the issue has figured much more strongly in focus groups than, say, Europe.

John Major and Michael Portillo, the Defence Secretary, secretly agreed on the pounds 60m project four months ago. Mr Portillo announced last week that the Treasury's Contingency Fund would be raided to pay for a new vessel that would be "a symbol of the nation's pride" and act as a showcase for Britain's design and engineering skills.

However, with Britannia still in active service, the Ministry of Defence cannot put in a firm order for a new royal yacht until next year, leaving the plan vulnerable to cancellation by a Labour government.

"This is just a Portillo political stunt," complained a senior shadow Treasury source. "The Labour Party is determined to keep an iron grip on public spending. It is clear, as we move into the election period, that the Tories are prepared to make any spending commitments if they think it will help get them elected. We will not fall into the same trap."

The Queen had expressed pleasure at the announcement of her new vessel. Labour's decision to rule out state funding puts the whole project in jeopardy.

This latest twist in the royal yacht saga will dismay Tory political managers who have misjudged the public mood at a sensitive time. The Cabinet is to meet in "political session" all day tomorrow to weigh up options for the date of the general election and lay down the outlines of the Conservative manifesto. Its main plank will be "stability", linked to the traditional theme of opportunity for all.

The Opposition held a series of top-level meetings last week, preparing for a snap election if Mr Major decides not to risk humiliation in a by-election due in Wirral South on 6 March. The by-election must be called this week, according to parliamentary convention. Three dates are now being discussed for polling day: 20 March, 10 April and 1 May.