Darling under fire as Brown plans reshuffle

By Sumeet Desai

LONDON (Reuters) - With the Labour Party facing a rout in Thursday's local and European elections, Prime Minister Gordon Brown looks sure to reshuffle his cabinet and Chancellor Alistair Darling could be the most high-profile victim.

Some aides say they have been urging Brown to put schools minister and close ally Ed Balls into the Treasury for a while, arguing it would bring more discipline to the ministry and give Labour a better chance of winning a national election due by next year.

Darling has also become embroiled in the ongoing row about MPs' expenses and Brown said on Monday that the chancellor had made a "mistake" in claiming a service charge for a flat he owned and had let out.

Darling said he had repaid 350 pounds and apologised for the claim which covered a period in 2007 when he was moving out of his London flat and into the chancellor's official residence in Downing Street.

Darling said he had no plans to resign. Asked about speculation that he might be replaced in a government reshuffle, Darling told television reporters: "It is up to the prime minister. He has got to decide the team he wants."

A source close to Brown told Reuters that reshuffle plans have reached a stage where which officials would move departments has been discussed though no decisions have been taken and probably won't be until after the local and European elections on June 4.

"He (Brown) would be mad not to put Ed in now," the source said. Labour is well behind in the polls and set to lose power to the Conservatives next year after ruling since 1997.

"FALL GUY?"