Improve or quit, Clarke tells Brown

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Mr Clarke had already re-ignited the prospects of a leadership challenge when he warned the Labour Party would not allow the Premier to lead them to "utter destruction" at the next election.

In an article for the New Statesman magazine, Mr Clarke said there was a "deep and widely shared concern" within the party that the Government was currently heading for disaster.

But in an interview with the BBC, the former Cabinet minister warned the Premier he would have to improve or "stand down as Prime Minister with honour and have a proper leadership election".

Mr Brown had been a "brilliant Chancellor" but had not established his political authority.

It was "entirely possible" for him to "turn it around" but if he failed to do this and then did not then resign the Cabinet would have to decide on a course of action. But he told BBC Radio 4's Today programme that at present there was no "clarity" about how to address the "deep concerns" within the party.

He said: "What I believe is there are two essential possibilities, both of which are perfectly honourable. The first is for the performance of the Government to improve significantly ... or the second is for Gordon Brown to stand down as Prime Minister with honour and have a proper leadership election to address the proper issues. Both of those are perfectly reputable courses of action."

Asked how long Mr Brown had left, he said: "I think it is a question of months really. It is a question of seeing how it works forward and whether he can deal with the situation.

"I am personally a sceptic ... but I also believe it is entirely possible that he could turn it around. What many people will be wanting to see very soon is clarity about how he is actually doing that."

Following the article but before his radio interview Mr Clarke was criticised by Schools Secretary Ed Balls. Mr Balls, a key ally of Gordon Brown, told GMTV: "It's not the first time Charles has made those kind of comments. I think it's Charles being Charles. I don't think that's where the debate will be when we get to the next general election."