Darling and Mandelson at war

What exactly is the point of Alistair Darling?  After seeing off an attempt by Gordon Brown to remove him from his job as Chancellor, he has seen ministers trampling all over his patch, with the likes of Schools Secretary Ed Balls, the man Brown wanted as Chancellor, happily straying into economic policy whenever he feels moved to do so.

But things appear to have reached a head after Business Secretary Lord Mandelson announced on yesterday's Today programme that the Government will be keeping voters in the dark about its future spending plans until after the election.

The full impact of Mandelson's statement took time to sink in in Westminster, but when it did it rang some ominous warning bells.

It had long been expected that the spending plans (the Comprehensive Spending Review) would be delayed until after the election. It was mildly surprising that Mandelson made the announcement, rather than the man responsible, Alistair Darling, but MPs are getting used to Mandy's increasing power.

But the full scale of the incident only emerged when Downing Street insisted it was for the Chancellor to decide on the timing of the CSR. That was followed by a pretty blunt statement  from the Treasury that "no decision has been made". Later even Brown himself told the Commons it was all a matter for Darling.

The Chancellor, it appears, had stamped his foot in fury that Mandelson had not only trampled over his turf, but made him look silly and secretive into the bargain.

His anger intensified after Mandelson's statement had seen Downing Street and the Treasury facing a barrage of questions from journalists over who exactly was running the economy.

Only last week, Bank of England governor Mervyn King had done his best to embarrass the Government, and Darling in particular, by giving a lengthy explanation of how tougher action was needed to cut the massive public debt.

The Chancellor is said to be furious that he is in danger of looking like a bit player in the big economic game, and he probably fears there is a plot to destabilise him after he saw off the threat to his job.

This is a highly dangerous situation, as any number of governments have discovered. When chancellors fall out with their prime ministers - or, in this case, Lord Mandelson, which is very much the same thing - the potential for political damage is huge.

Relations between Numbers 10 and 11 Downing Street have always been crucial to the smooth running of government and have often been the source of highly-damaging friction - in recent years between Thatcher and Lawson and then Blair and Brown.

If Darling decides to escalate this turf war and it erupts into a test of strength between him and Mandelson and/or Brown, it can only further damage the Government. That is why Brown attempted to pour water on the fire yesterday. But there are still some glowing embers threatening to burst back into flame. ·