Brown steps down to give Lib-Lab pact a chance

Gordon Brown announced at 5.0pm that he will quit as Prime Minister to allow formal talks to take place with Nick Clegg's Liberal Democrats on a full coalition. But he said he won't go until the autumn, to enable the economic recovery to be achieved.

He said an election for a new Labour leader would take place this summer. The markets give his astonishing statement the two fingers - the pound immediately plunged in value – and senior Conservatives reacted with fury.

The Mole correctly predicted Brown's move this morning. Nevertheless, his statement completely wrong-footed David Cameron, the Tory leader, who was inching towards his own deal with Clegg and had made a number of detailed concessions.

But according to Brown, Clegg had approached him this afternoon asking for formal talks.

Brown said he believed a coalition of 'progressives' in Britain would be good for the country, despite frustrating those Tory voters who voted for Cameron last Thursday, as a result of which the Conservatives got the biggest number of gains since the war.

But it means that Brown will be hanging on to power - in spite of losing the election and losing nearly 100 seats which many Labour candidates blame him for - until a new Labour leader can be elected.

The breath-taking boldness of Brown's statement left TV presenters and reporters spluttering on the doorstep of 10 Downing Street. "It's the most historic day I have ever witnessed standing outside this door," said one BBC political hack.

Brown who had been meeting all day with a small coterie of advisers, including Alastair Campbell, Lord Adonis and Peter Mandelson, said he would be gone by the time of the next Labour party conference. But that is not until October. In the meantime, he intends to act as his own caretaker Prime Minister until an election produces a new leader.

This astonishing plan is designed to wreck the Clegg-Cameron talks. It will outrage the Cameron camp who will claim they alone have the right to form the next government, having gained the most votes and the most seats of any party last Thursday.

It is also likely to produce outrage among some voters who, if the Lib-Lab pact succeeds, are once again presented with a prime minister they never voted for. However, it is fair to say that this is not only a Labour trait: neither John Major not Alec Douglas-Home were voted into office by the electorate when they became PM.

Tory grandee Lord Heseltine attacked Brown's move as "politics at its most sordid" and "mind-blowing". He told Sky News this evening: "I don't know how anybody has got the bare-faced nerve to put forward such a proposition. Gordon Brown has been told by his colleagues he has got to go. They will have said, 'Gordon - the game is up. You are a loser and your party wants you out.' Don't let's talk about national interest or dignity. This is politics at its most sordid."

The frontrunners in the Labour leadership election will be David Miliband, Ed Balls, Harriet Harman and possibly Alan Johnson. Ed Miliband - who is close to Brown - will have to make a difficult choice over whether he runs against his own brother.

Brown said the Cabinet would meet shortly to discuss Clegg's request and that a "formal policy negotiation process" would be established under the Cabinet Secretary Sir Gus O'Donnell.

It will come as a big relief to Lib Dem lefties such as Simon Hughes who sees himself as a defender of Old Liberal grass-roots opinion and was pouring cold water on a deal with the Tories over the weekend.

There is just one snag with Brown's bold move - he has to get a majority in the Commons for his Queen's Speech. The Tories, who command 306 votes, will be desperate to vote him out of office if he goes ahead with a coalition with the Lib Dems. They will need the DUP to support them.

Brown will be able to count on Caroline Lucas, the new Green MP, an Irish Alliance MP, and three SDLP MPs. He may also need the Welsh Nats and the SNP to support him and that could be very expensive because they will want millions of pounds more for Wales and Scotland.

It's now up to Nick Clegg to choose whether to get into bed with Brown, whom he doesn't personally like. He knows he will be damned if he does, and damned if he doesn't. ·