Come out of hiding and lead us, Brown urged by his party

Backbenchers and ministers said they wanted the Chancellor to assert himself as Premier-in-waiting after the Home Secretary confirmed he would not bid to become party leader.

Mr Reid's surprise decision to withdraw from frontline politics removed any doubts about the Labour succession and paved the way for Mr Brown to take over from Tony Blair in July.

Sources claimed it was now possible to deliver the "stable and orderly transition" promised by the Prime Minister.

But Mr Brown now faces calls from those within his party who fear the drawn-out handover will do more damage to the Government in the wake of Thursday's disastrous local election results.

One minister questioned why the Chancellor had not made a statement since Thursday and called on him to "come out of hiding" to reassure Labour.

The minister said: "Now that we know for certain it's going to be Gordon, we need to hear from him. He needs to show some leadership."

Other MPs called on Mr Brown to impose his emerging authority on Mr Blair by demanding a say in upcoming EU constitution negotiations.

They said they wanted to know what Mr Brown stood for, as well as details of his programme for when he enters No10 in two months.

Mr Brown will spend much of this week working out plans for his campaign, which is due to be unveiled on Friday.

On Thursday, Mr Blair is to resign as Labour leader, triggering a seven-week campaign to crown the Chancellor.

Mr Brown will appear on the same day in the Commons for Treasury Questions, minutes before the Bank of England is expected to raise interest rates to a six-year high.

Ex-minister Peter Kilfoyle said there was a "sense of resignation" in the party at the prospect of Mr Brown taking over.

He said: "I want a contest. A lot of people want to know what he stands for and what he'll propose. We don't know about his social policy or his views on foreign affairs."

Leading euro-sceptic Labour MP Ian Davidson said Mr Brown must set out his stall when the contest opens.

He called on Mr Brown to intervene in the negotiations on the future of the EU, which will be discussed at Mr Blair's last EU summit as PM.

The Treasury fears Mr Blair is preparing to negotiate away British powers in an attempt to secure a "grand bargain" as one of his last acts in office.

As Chancellor, Mr Brown will not attend the summit. But he fears Mr Blair may agree a deal that will be impossible to sell to Britons in a referendum.

Mr Davidson said: "It won't be Blair negotiating, it will be Blair surrendering. Brown should make it clear he will repudiate a bad deal. He should say he will put to a referendum anything unacceptable."

Labour chairman Hazel Blears, a prospective candidate for deputy leader, said of Mr Reid: "His decision means we will get a huge amount of change.

"It paves the way for a renewal of ideas, new people coming into Cabinet and that sense of dynamism and energy."

But there was criticism of Mr Reid's decision to quit as Home Secretary when his department is due to be split in two.

Ex-Home Secretary David Blunkett told Radio 4's Today programme the timing of Mr Reid's departure, in the midst of the departmental "deconstruction and reconstruction", meant "very profound reasons" must have driven him to quit.

The pressure on Mr Brown came as 45 per cent of company bosses said New Labour had been "bad for business".

In a poll by the Institute of Directors, just a third of the 500 respondents praised Tony Blair's ten years in power.

IoD director general Miles Templeman said: "There is a big thumbs-down for the conduct of tax and spend policy."

The strongest criticism was for red tape, with 81 per cent attacking the Government.