Ministers bid to move on from storm

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After another difficult weekend for Labour, with Ed Balls and the party's general secretary both forced to deny fresh allegations, the Commons was returning from its Easter recess.

Senior Labour figures acknowledged the affair had been damaging but insisted that Damian McBride, Gordon Brown's resigned head of strategy, was singularly responsible.

Lord Mandelson said Mr McBride was "no more" and insisted that voters were now more interested in what the Government was doing to fight the recession.

He will announce a new "strategic plan" to invest in Britain's industrial future, while Chancellor Alistair Darling was preparing for a crucial Budget on Wednesday.

But ministers were competing for the political agenda after claims at the weekend that Labour's general secretary Ray Collins was implicated in Mr McBride's smears plot.

Mr Balls, the Schools Secretary, was also accused of presiding over weekly Downing Street meetings to advance his own ambitions. Both denied the claims and were backed up by senior Labour figures.

Weekend polls suggested the affair had damaged Labour's hopes of re-election, with the Tories extending their lead to up to 19 points.

Olympics Minister Tessa Jowell and Lord Kinnock, the former Labour leader, acknowledged the harm to the Government.

Lord Kinnock added: "When people get involved in this kind of activity, the effect on the standing of democratic politics generally, but specifically the party with which they're associated, is always going to be damaging."