Plot to dump Brown

Battle lines were drawn last night for a Labour leadership contest between David Miliband and Jack Straw, as cabinet ministers declared that Gordon Brown's premiership was all but dead.

On the day Barack Obama swept into Downing Street for talks with the Prime Minister, members of the Cabinet were already discussing a future without Mr Brown as leader.

The Democratic presidential candidate offered his embattled host some words of sympathy: "These things go in cycles ... There are months when I'm a genius; there are months when I'm an idiot."

But there were fears that, despite a relaxed photocall with the most popular American politician since John F Kennedy, Mr Brown had been written off by his Cabinet as he departed for his summer holiday.

Last night, Mr Brown dismissed calls for him to resign, saying: "I'm getting on with the job."

However, in a highly significant development, it emerged that two of the youngest stars in the Cabinet, James Purnell and Andy Burnham, will give Mr Miliband a free run for the top job in the event of a contest. Mr Purnell in particular had been tipped as a strong contender to rival Mr Miliband.

The move – dubbed the "Primrose Hill Pact" for its echoes with the purported 1994 Granita deal between Tony Blair and Mr Brown – allows the Foreign Secretary to emerge as a clear contender from the Blairite, modernising wing of the Labour Party.

The left, meanwhile, are coalescing around the Justice Secretary, Mr Straw, who is being urged by MPs to tell Mr Brown the game is up after the disastrous defeat in the Glasgow East by-election.

They believe Mr Straw should stand against Mr Miliband on a continuity ticket and act as a caretaker before handing over to the next generation.

Until now, as many as seven possible contenders to succeed Mr Brown have been suggested, fuelling the sense that there is as yet no clear-cut alternative.

Neither Mr Straw nor Mr Miliband is ready to challenge the Prime Minister, but the emergence of their two names reveals how contingency plans for a contest are well under way.

It is almost certain that in September, unless there is a dramatic improvement in Labour's position, Mr Brown will face a public challenge or be told to go quietly by men in grey suits.

There was even talk that someone could stand as a "kamikaze candidate" to get rid of Mr Brown. Insiders said Mr Brown was "exhausted" and had "lost his spark" as he met the youthful and charismatic presidential candidate in Downing Street yesterday.

Asked what advice he could offer the PM, Mr Obama said: "You're always more popular before you're actually in charge of things, then once you're responsible, you're going to make some people unhappy."

Earlier, Mr Obama met Mr Blair at the Churchill Hotel in the West End of London in controversial talks that underlined the contrast between the fortunes of the Prime Minister and his predecessor.

After Downing Street, the Senator was driven to the House of Commons, where he met the Tory leader, David Cameron, for the first time, for one hour and 10 minutes of "warm" talks.

A microphone picked up Mr Obama telling Mr Cameron: "I want to congratulate you on your success."

Aides said the two men had a lot in common – including the fact that they are both left-handed – and had discussed the economy, Afghanistan, Iraq and climate change.

The cheery nature of the talks was in contrast to the grim mood at Labour's National Policy Forum, meeting in Warwick.

The sense that Mr Brown is in the dying weeks of his premiership was underscored when it emerged that Des Browne, the Defence and Scottish Secretary, is planning his post-Cabinet career.

George Howarth, a former minister and an ally of Mr Straw, publicly called for Mr Brown to go. He said: "Over the next few weeks, people need to think long and hard about how we go forward to get out of this. Obviously, that includes the question of the leadership of the party."

As the Cabinet hit the panic button, aides of Alistair Darling went out of their way to say that the Chancellor fully backed the PM. Mr Straw tried to dampen speculation by urging MPs to "calm down". But observers noted that, unlike some of his cabinet colleagues, he has failed to take to the airwaves since Thursday's by-election to offer a ringing endorsement of the Prime Minister.

Mr Burnham, the Culture Secretary, appeared to be lining himself up behind Mr Purnell, who could be the next-leader-but-one. He told The Times yesterday: "We've done a lot, but we've been in power a long time and people say: 'Where are the ideas?' The onus is on people like James and me to come out more and articulate our ideas."

Peter Mandelson, an old foe of Mr Brown, made it clear that he believed the party had to choose Mr Miliband, when he said it needed a "platform to continue modernising Britain".

In an interview on Radio 4's Today programme that was seen as mischief-making by Mr Brown's supporters, the EU Trade Commissioner added: "I'm not going to offer you some platitudinous statement ... of course by-elections matter, of course they mean something."

Polling of marginal constituencies is expected to show Labour falling behind even the Liberal Democrats in several key seats.

Mr Brown, his wife Sarah, and their children, John and Fraser, are to spend the next three weeks on holiday, including two weeks at a manor house near Southwold in Suffolk.

At a nearby country park yesterday, Mr Brown said he was "doing well" adding: "I think everybody's ready for a holiday."