Miliband calms leadership talk

LONDON (Reuters) - The favourite to succeed Gordon Brown as head of the Labour Party sidestepped claims on Wednesday he was launching a leadership bid and said he was convinced the prime minister could win the next election.

Foreign Secretary David Miliband, a youthful figure at the centre of the party, sparked talk of a leadership challenge by saying Labour needed a "radical new phase" to claw back a 20-point deficit to the Conservatives in opinion polls.

Miliband later told a news conference with his Italian counterpart that the only thing he was campaigning for was a successful Labour government, but repeatedly refused to rule himself out of a leadership contest.

"Can Gordon lead us into the next election and win? Yes, I'm absolutely sure of that," Miliband said.

In an article in the Guardian, Miliband acknowledged Labour had made mistakes during 11 years in power and said change was needed to overcome a stalled economy and mount a challenge at the next election, due by May 2010.

"To get our message across, we must be more humble about our shortcomings but more compelling about our achievements," wrote Miliband, 43. "New Labour won three elections by offering real change, not just in policy but in the way we do politics. We must do so again."

The timing of the article as much as its substance led political commentators and newspaper editors to interpret it as laying the ground for a possible challenge to Brown, who succeeded Tony Blair little over a year ago.

An aide to Brown described the leadership talk as "midsummer madness" and said it would settle down in the coming months.

RATINGS FALL

Labour's poll ratings have fallen to historic lows of around 25 percent as the impact of the global credit crisis and Brown's perceived mishandling of policy have hit its popularity.

The loss of a once-safe Labour seat in parliament in an election in Scotland last week compounded Brown's woes.

The Times carried a banner headline declaring "Miliband positions himself for leadership". Other newspapers were more circumspect, but most saw the article as a bold move at a crucial time by a young and rising politician.

Miliband did not mention Brown in the article, which political analysts said appeared carefully written to tread around any direct interpretation of a leadership challenge while keeping its author in the frame.

"It's obviously written in a very coded way," Wyn Grant, a professor of politics at Warwick University, told Reuters.

"I think it's a deliberately ambivalent statement that could be seen as setting out an agenda for the future or as something of a challenge," he said.

He said he remained sceptical about a leadership contest being mounted.

Up to six senior Labour MPs have been mentioned as possible challengers.

The party would be reluctant to change leader for the second time in 18 months without holding an election, and a leadership tussle would fuel Conservative calls for an election to be held at once rather than waiting until the 2010 deadline.

(Additional reporting by Sumeet Desai and David Clarke, editing by Tim Pearce)

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