Brown stresses his key role in election strategy

Gordon Brown yesterday underlined his determination to play a key role in Labour's general election strategy by making clear he will be responsible for much of the manifesto on which the party will fight for a third term.

The chancellor peppered a speech in the north-east, where he was campaigning for a Yes vote in the forthcoming devolution referendum, with his election priorities - principally measures to narrow regional divisions by improving education and encouraging enterprise.

Backed by the deputy prime minister, John Prescott, who is the architect of plans for an elected north-east assembly, Mr Brown made it clear that he would not be sidelined by the party's newly installed election coordinator, Alan Milburn, MP for Darlington.

A week before 1.9 million electors in the north-east receive voting papers for the all-postal referendum on November 4, the chancellor told the business community in Newcastle upon Tyne that an assembly was essential to counter the dominance of the south-east.

Amid a sea of Labour posters and leaflets lamenting the economic weakness of the north-east and the growing strength of London, Mr Brown maintained that regional inequalities were not inevitable.

But he cautioned: "Balanced economic growth becomes impossible if we have unemployment and emigration and the under-use of resources in one part of the country and congestion and overcrowding and huge inflationary pressures in the other."

With jobless rates in the north-east almost twice those in the south-east, he maintained that an elected assembly would help to re-balance England.

"There is nothing inevitable about regional inequalities," he said. "The north-south divide is not and should never be treated as a permanent feature of the British economy."

Mr Brown, who has forged a strong alliance with the deputy prime minister to push for greater decentralisation to the English regions - particularly in the north - used his speech to highlight the need for far-reaching reforms in the workplace and in the school.

But, time and again, he referred to the forthcoming election campaign. "The theme of this referendum and the coming general election manifesto will be the economic reforms we've got to make, region by region, to become more competitive, productive, prosperous, wealthy, as a nation," he said, in the first of a string of references to a "third term manifesto".

Later, visiting the Millennium Bridge, which links the Newcastle-Gateshead waterfronts, the chancellor was asked whether he would be writing the manifesto. "I am doing the economic brief and I'll be having the pre-budget report and the budget, and that will, of course, influence the manifesto," he replied cautiously.

Earlier, addressing the businesspeople, John Prescott joked that he was the chancellor's "agent", before pleading with his audience not to draw any "misinterpretation" from a throwaway line. "I'm back on the campaign trail," he enthused.

"It's about the north leading the way. You have been demanding to have more 'say' about things ... a chance to make your own decisions instead of them being made by quangoes and all sorts of government departments."

Mr Brown said he had been a supporter of north-east devolution since the early 1980s, when he first met Mr Prescott - then opposition regions spokesman.

But opinion surveys show many voters have still to make up their minds, with one today in a local newspaper giving the No campaign the advantage.

Campaign posters underline the nervousness of devolution supporters, with some proclaiming: "This is our chance - let's not waste it."

While some were impressed by Mr Brown's performance at yesterday's events, several key businesspeople claimed the chancellor and deputy prime minister had grossly overplayed the influence of a north-east assembly.

One said the package on offer was "barely worth having" because Whitehall would control so many strings.