Blears rules herself out of deputy leader race by backing Johnson

Ms Blears has endorsed rival Alan Johnson to be deputy leader. She said: "I've already voted. I've voted for myself first obviously, and then for Alan Johnson."

Her move in naming her adversary as her second preference is highly unusual. By doing so while other candidates kept quiet about their second vote she effectively conceded she had given up hope of winning.

Ms Blears is not able to pull out of the contest officially as her name is on the ballot paper.

Campaign insiders revealed she had admitted privately she no longer expected to win but did not regret standing to be Gordon Brown's number two.

The arch-Blairite's high profile campaign has kept her in the spotlight and increased her chances of getting a ministerial job when the Chancellor takes over.

She has impressed many on the hustings but was always going to struggle with an electorate dominated by trade unions and activists, some of whom want the Labour party to shift to the Left.

Ms Blears is expected to keep campaigning energetically until the ballot closes next Friday and will not publicly admit she does not expect to win.

A spokesman added: "We are confident Hazel will do well. She has already voted for Alan Johnson for number two and would encourage her supporters to vote for him second."

Mr Johnson - whose views are closest to Ms Blears' out of all the rivals - and fellow cabinet minister Hilary Benn are currently the bookies' favourites.

News of Ms Blears' decision to back Mr Johnson emerged as she came under fire from rival camps for taking a £10,000 donation from an "anti-trade union" law firm.

Labour MPs seized on revelations that Manchesterbased Peninsula Business Services Ltd had boasted it could win compensation claims in industrial tribunals "even in situations where the employer has an extremely weak case".

The firm handles 3,000 cases brought mainly by trade unions on behalf of workers every year.

The company's website reads: "We have overturned many employment tribunal decisions by way of reviews and appeals.

"We have saved very many clients large sums of money by our expertise in reducing claims by claimants even in situations where the employer has an extremely weak case."

Kevan Jones, Labour MP for Durham North and a backer of Harriet Harman, said: "It is absolutely disgraceful that Hazel Blears has taken money from a firm that boasts it can cut compensation claims from workers."

Ms Blears defended the donation, saying: "Peninsula is a reputable company, providing advice on health and safety and good employment systems to small organisations, helping them stay on the right side of the law."

Peter Done, managing director of Peninsula, said: "We aim to improve industrial relations and harmony in the workplace and to resolve any disputes at an early stage."