Gordon Brown moved to dampen down speculation over a rift at the top of the Labour Party last night, by issuing a call for unity in the wake of the prime minister's surprise announcement that he would stay on for a full third term.

After a weekend of media briefing between his and Tony Blair's camps, the chancellor told supporters that "the unity of purpose that this government has is both important to the Labour Party and also to the country".

Meanwhile deputy leader John Prescott warned that the "full wrath" of the party would be unleashed on any potential successor to Blair who put "personal ambition" before the imminent general election campaign.

Blair himself is also reported to have made clear that he believes the eventual leadership race should last only six weeks, to minimise disruption to the government. 

The Independent says that the prime minister telephoned the editors of several national newspapers from Chequers to deny speculation that his decision had deepened the divisions with Gordon Brown.

Meanwhile, Cherie Blair will begin paying off the Blairs' mortgage on their new £3.6 million home today by starting her American lecture tour.