Milburn hints at taking on Brown for No 10

Alan Milburn, the former health secretary, has hinted that he could challenge Gordon Brown for Downing Street after Tony Blair relinquishes power.

His refusal to rule out a leadership bid will fuel the feuding between allies of the Prime Minister and the Chancellor over the timing of Mr Blair's departure. Mr Blair has said he will step down before the next election, but has refused to give any more details of his plans.

The former Labour deputy leader, Lord Hattersley, has called for a truce, describing the infighting as the most bitter he had experienced in the party.

Mr Milburn, who has already taken a swipe at the Chancellor's Budget package, is an arch-Blairite regarded with hostility in the Brown camp. Asked yesterday whether he could run, Mr Milburn said: "That is a really good question and it deserves a really, really good answer. The answer is, 'When we have a vacancy'. At the moment, there isn't a vacancy. I think personally it is highly unlikely, but that is a bridge that I think we all need to cross."

He told BBC1's Sunday AM programme that he hoped Mr Blair would be in Downing Street for a considerable time. He added: "Of course, there will be at some point a succession, a coronation, an election at some point. That is a good question when that moment arrives."

A Brownite MP said: "We would welcome Alan standing; Gordon would win overwhelmingly."

But with less than four weeks to a tricky set of local elections for Labour, another MP attacked Mr Milburn for stoking "factionalism" in the party. He said: "Instead of launching a leadership campaign, he ought to be getting on with the campaign against the Tories."

Lord Hattersley, who endured the civil war that split Labour in the early 1980s, told GMTV: "I've been in the Labour Party 50 years, and it's 40-odd since I was elected to Parliament. I've never known a time when the in-fighting in the Labour Party was so bitter."

He backed calls for the Prime Minister to announce his departure timetable, suggesting he should leave Downing Street by the end of the year. "It's causing immense damage and the storms will go on until we know when the Prime Minister proposes to leave office," Lord Hattersley said.

Such an announcement would ease the way for a "peaceful transition" and prevent a "great palace revolution and civil war and blood-letting" which would be ghastly for the Government and damaging for Labour in the long term.

In another development, Harriet Harman, the Constitutional Affairs minister, whose husband, Jack Dromey, the party treasurer, triggered the furore over Labour leaders soliciting loans from wealthy backers, broke her silence over the controversy.

Asked on ITV's Jonathan Dimbleby programme if she could imagine why rich people had been asked to make loans rather than donations, she replied: "No I can't. But I don't really need to imagine that because it is being looked into ... it is being fully looked into."

Ms Harman has given up parts of her role which involve overseeing election laws and Lords' reform. She denied Mr Blair had "subverted" the rules.