Now for election ’08

Brown uses his veto

Gordon Brown intervened directly to prevent a French attempt to weaken EU competition laws yesterday, as leaders moved towards a deal on a new treaty.

The Chancellor leaned on Tony Blair to force the retention of the EU’s commitment to “undistorted competition” after it was dropped from a list of the Union’s objectives and values. The Prime Minister secured a protocol that officials said gave “legal certainty” to unhampered competition as an EU goal.

In an unprecedented move, Mr Brown, who takes over as Labour leader tomorrow, telephoned Mr Blair from London to tell him that the agreement as it stood then was unacceptable because the changes promoted by France would down-grade the EU’s commitment to a free market.

The Chancellor was said to have been horrified after Downing Street had appeared to accept the French position in an apparent attempt to win President Sarkozy’s support for Britain’s “red line” positions. His intervention was one of several calls to Mr Blair as the summit struggled towards a deal.

The French move had angered politicians, lawyers and antitrust officials. Mario Monti, the former European Competition Commissioner, said that such an amendment would be a gift to “resurgent economic nationalism” and would lead to the unstitching of the EU.

Mr Blair dismissed accusations that changes to the preamble of the treaty – which now commits the EU to “an internal market” but omits the condition “where competition is free and undistorted” – would “rip out the jewel in the EU’s crown”. New wording will be added to make it clear that guarantees of a free market in the EU’s founding Treaty of Rome will be unaffected, he said.

The big issue that threatened to scupper the whole summit, Poland’s battle for extra voting weight, was heading towards a solution last night after President Kaczynski discussed a possible compromise deal by phone with his brother, Jaroslaw, the Prime Minister. Several offers were made by Angela Merkel, the German Chancellor, drafting the new treaty, including a review and several more MEPs for Poland.

Mr Blair teamed up with Bertie Ahern, the Irish Prime Minister, to secure an opt-out from moves to more qualified-majority voting on justice, home affairs and social security policies.

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Cameron tries to steady nerves on Right before Labour assault

David Cameron moved to calm the Right of his party yesterday as he announced that David Davis, the man he beat to become Tory leader, is to develop new policies on how to break down class barriers.

Mr Davis, famously brought up by a single mother on a council estate, will set up a task force on social mobility next week, Mr Cameron said in a speech yesterday.

The row over grammar schools, in which the Tory leader’s privileged background became an issue, threatened to undermine his leadership just as Gordon Brown finally takes over from Tony Blair.

In an attempt to steady nerves before an expected Labour onslaught, the Conservative leader emphasised traditional themes of security and family in an address to activists in South London. Although delivered against a woodland backdrop, Mr Cameron chose for once not to urge his party to change, nor to dwell on issues such as the environment. Instead his message to “battle for Britain” against state control drew applause for its praise of individual freedom as “the great driving force of Conservatism through the ages”.

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He also called for comprehensive schools to have a grammar stream for the brightest pupils, a tacit apology for initially backing an attack on selective education by David Willetts. The Shadow Education Secretary’s claim that grammar schools entrenched advantage led to charges that Mr Cameron, educated at Eton, was removing one of the few ladders available to children from a poorer background.

Mr Davis, a former grammar school boy who was reported to be among Shadow Cabinet members angry about Mr Willetts’s speech, has been planning his own task force on social mobility since last year. Mr Cameron agreed in principle early this year but signed off the task force only in the past few weeks. It is expected to develop new policies on education, training housing and business regulation and will report later this year. Although the Conservative leader has agreed to allow Mr Davis to develop new policies, he has made clear that his recommendations will be put to the Shadow Cabinet for approval before any are adopted.

Mr Davis’s new policy-making body is in addition to the six policy review groups that Mr Cameron set up shortly after becoming leader and which are all due to report before the autumn.

Plans to make NHS services accountable to new local watchdogs will be unveiled tomorrow, as the first of the reports is published.

The public services policy group led by Stephen Dorrell, a former Health Secretary, is also calling for dedicated budgets to improve public health and more powers for the Chief Medical Officer.

Mr Cameron has in the past made a virtue of his policy review groups’ independence but, fearing another battle with the Right, is moving to vet their reports before publication. He has asked George Bridges, his head of campaigning, to weed out the most controversial policy proposals, it emerged yesterday.

The dangers ahead were well illustrated at the weekend when Hugo Swire, the Shadow Culture Secretary, was hurriedly forced to recant a suggestion that museums and art galleries might be allowed to charge admission.

Brown joins drive to stave off referendum on future of the EU

Gordon Brown is expected to hold last-minute talks, possibly tonight, with Tony Blair and Nicolas Sarkozy, the French President, to plot how to avoid a referendum on the future of the European Union.

The key discussion, before this week’s summit of European leaders in Brussels, is understood to have been brought forward as both Britain and France fight off efforts to revive plans for an EU constitution.

They may meet at Chequers or may be connected by video conference, The Times understands, to ensure a tough Anglo-French axis at the 27-nation EU summit where both countries are desperate to block moves for a referendum.

On Friday Downing Street appeared to rule out in advance the question of whether a new treaty would be put to a vote, insisting that there was an “emerging consensus” that it would be an “amending treaty”, rather than a new constitution. No 10 added that there was no precedent for holding a referendum on a treaty that only amended previous agreements. Mr Blair’s promise in 2004 for a referendum was only for a new EU constitution, a government spokesman said. Mr Brown’s allies, however, say that a referendum may still be held if it becomes clear that the summit treaty is the old EU constitution in all but name.

They endorsed comments made by Geoff Hoon, the Europe Minister, who said that the final judgment on whether it needed to be put to a referendum had to wait until the “outcome of negotiations”.

Mr Hoon, speaking yesterday on The World This Weekend on BBC Radio 4, said: “Clearly a judgment has got to be made in terms of what is in the final package. It is important not to judge the outcome of the negotiations, but equally we are trying to negotiate an amending treaty.”

There were signs yesterday that Mr Blair will attempt to do a deal on the EU charter of fundamental rights, one of the most controversial aspects of the proposed treaty, by negotiating opt-outs from parts that cross British “red lines”. These include anything that gives the EU enhanced powers to set social or employment law, or overrule British common law.

Mr Sarkozy is under less pressure than Mr Blair and Mr Brown to hold a referendum on the outcome of the talks. During the presidential campaign he made it clear that he would regard victory as a mandate to negotiate a treaty that required only parliamentary approval and not a repeat of the popular vote lost in France in 2005.

Among the topics sure to be discussed between Mr Blair, Mr Brown and Mr Sarkozy is the new French President’s reported suggestion that Mr Blair become the first full-time president of the EU Council, a post that is envisaged by the new treaty.

Downing Street played down the idea and yesterday Margaret Beckett, the Foreign Secretary, said that she thought it “singularly unlikely”. Mr Hoon, however, said he thought that Mr Blair would be a strong candidate. “There are few people with his experience in international and European negotiations,” he added.

The idea met with amusement from European diplomats yesterday because Britain was the first country to propose a full-time EU Council president back in 2002. “His name has been put into the basket many times over the past couple of years,” one diplomat told The Times. “But we are far from selecting a candidate, let alone the incumbent.” Other possibilities include Bertie Ahern, the Irish Prime Minister, and Guy Verhofstadt, ousted by voters last week as Prime Minister of Belgium.

Angela Merkel, the German Chancellor, who is trying to gain support for a redrafted EU constitution, could be a candidate if her fragile coalition government collapses in the next year. She continued her round of diplomacy before the summit, meeting Mirek Topolánek, the Prime Minister of the Czech Republic, in Berlin at the weekend.

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Blair denies Iraq dented popularity

Queen's birthday honours recognise famous names and private deeds

Voters are not going to get a say on new European treaty, No 10 insists

MPs reject call for Iraq inquiry

MPs have rejected the Tories' call for an inquiry into the war in Iraq.

Shadow foreign secretary William Hague had told MPs ministers had "no adequate reason" to block an inquiry into the war's build-up and immediate aftermath.

But the Commons rejected the call by 288 to 253, although the government's majority was nearly halved at 35.

Foreign Secretary Margaret Beckett said the issues would be explored "in the round" eventually, but not while UK troops were still in action in Iraq.

She echoed sentiments expressed earlier by prime minister-in-waiting Gordon Brown, who agreed lessons had to be learned, but rejected an immediate inquiry.

She said: "At this critical juncture, when Iraq's future clearly hangs in the balance, it would be wrong, plain and simply wrong, for us to divert our focus from the tasks that need completing now and once again turn our gaze backwards to what has happened in the past.

"It is our responsibility to the people of Iraq, which should receive our complete focus and attention in the critical months ahead."

Franks inquiry

But Mr Hague said the motion was about the principle of holding an inquiry, rather than demanding one now.

He told the House of Commons: "No adequate reason remains for the government to refuse to establish such an inquiry to begin its work in the near future."

Mr Hague argued for an inquiry along the lines of that held into the Falklands War, a wide-ranging probe chaired by philosopher Oliver Franks.

Brown says party members must shape policy

Parents 'can check sex offences'

Parents will get the right to ask for details about people who are in regular contact with their children following a review of information on paedophiles.

However, the Home Office proposals stop short of a 'Sarah's Law', which would make information more widely available.

The review on the way details about convicted sex offenders are handled is set to be unveiled on Wednesday.

Sara Payne, whose daughter Sarah was murdered by a paedophile in 2000, said the move was a "massive step forward".

She said: "If you have a child or look after a child you have a place you can go and have some access (to details about paedophiles).

"You don't have full access but you have some access."

'Vigilante reprisals'

Children's charity the NSPCC welcomed the proposals, saying wider access could force convicted paedophiles into hiding and put children at greater risk.

Public protection and the safety of our children is paramount Home Office spokesman

NSPCC chief executive Dame Mary Marsh said: "The government is rightly tackling public concern at how children are currently protected from sex offenders.

"The government could give stronger, more consistent guidance on how to share information on local child sex offenders."

She said agencies should consider how best to disclose details about specific offenders on a case-by-case basis.

She added: "This should help a concerned parent or other individual take appropriate protective action.

"But allowing anyone access to information about sex offenders is dangerous. It raises the spectre of offenders going into hiding because they fear vigilante reprisals and that does not help protect children."

Names and addresses

The right to ask for information on an individual is expected to extend to parents, guardians and carers.

A campaign for a 'Sarah's Law' was launched after Sarah Payne was murdered by Roy Whiting.

Megan's Law was named after seven-year-old Megan Kanka who was killed by convicted sex offender Jesse Timmendequas in New Jersey in 1994.

The American law gives people access to names and addresses of known paedophiles.

A Home Office spokesman said: "Public protection and the safety of our children is paramount.

"The changes we are proposing will further strengthen the safeguards we have to make sure that child sex offenders can't harm our children.

"For the first time there will be circumstances where members of the public will have the right to request details of possible sex offenders who may have contact with their children.

Police link Madeleine phone call to mobile from Argentina

 

The mystery call that police believe may contain “credible” information on the disappearance of Madeleine McCann has been traced to a mobile telephone registered in Argentina.

Detectives hope that the caller may hold the clue to the whereabouts of the four-year-old, who was abducted from the bed of her Algarve holiday apartment 37 days ago.

Kate and Gerry McCann still hope contact can be re-established before tomorrow when they travel to Morocco in the final of a series of visits to raise awareness of their daughter’s disappearance. They will then remain in Portugal, co-ordinating the search for Madeleine.

Although aware of the possibility that their daughter could be dead, they believe it is more likely that they are just one telephone call from having her returned home safely. The couple hoped that such a message had been received on Wednesday when British police told them that a “credible” call had been received by the Guardia Civil in Spain from someone claiming to have information about Madeleine’s whereabouts.

 

Detectives are still investigating the call, which they have discovered was made on a telephone registered in Argentina. They have emphasised that it could have been made elsewhere in the world.

A police source said: “The call came from an unregistered [pay-as-you-go] phone but there was sufficient information to know where it was bought or registered.” Authorities in Buenos Aires are understood to be attempting to trace the owner of a pay-as-you-go mobile registered with an operator in Argentina.

The caller is believed to have demanded to speak to the McCanns and a time was arranged for them to accept the call. The call was considered so potentially significant that the McCanns delayed a trip to Amsterdam, to help police investigate.

A British police source said: “The importance of this line of inquiry is still being assessed and attempts to re-establish contact are continuing.”

Although Spanish officials denied the existence of a call, a Guardia Civil source confirmed that it had been received. He told the Portuguese paper Correio da Manhã: “Only time will tell if this call gives help or not to the case.” The newspaper said that the caller appeared more credible than the hundreds of others because of the “amount of detail given”.

The McCanns, from Leicestershire, have decided to stay in Praia da Luz throughout the summer in the hope that Madeleine will be found. A family source said: “They don’t put a timescale on it but are prepared to live here until the end of the summer at the earliest. They are getting semi-regular meetings with Portuguese police and want to maintain that contact, and they are happy with the co-operation back home. The source said that even if Madeleine was “somewhere else physically, this is the place where mentally they make a connection. They can’t go from here”.

Mr McCann, 39, wrote in his internet blog findmadeleine.com yesterday: “After Morocco we will have to take stock and decide on our best strategy.”

Mrs McCann, 38, is concerned at the lack of publicity in North Africa despite the ease of access from Portugal.

The couple believe that Madeleine could have been taken out of Portugal soon after her disappearance and are alarmed at the refusal of the main airport, in Lisbon, to publicise the search. Baroness Ashton of Upholland, a justice minister, has said she will raise the issue with her Portuguese counterpart.

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McCanns Prepare For Final Push

The parents of Madeleine McCann have gone back to Portugal to prepare for the final stage of a tour to raise awareness of their missing daughter.

The McCanns have crossed Europe

Gerry and Kate McCann have already visited Italy, Spain, Germany and the Netherlands to raise awareness of the four-year-old's plight.

They attended a concert in Lagos held in honour of Madeleine, who went missing from their holiday apartment in the Algarve resort of Praia da Luz 36 days ago.

The couple are expected to spend time with their two-year-old twins Sean and Amelie as they prepare to travel to Morocco.

Earlier, their flight from Berlin to Amsterdam was delayed after police received a mystery phone call from a man claiming to know Madeleine's whereabouts.

The "credible" call was taken from a man who wanted to speak directly to the McCanns, according to a Spanish police source.

It was traced to an unregistered pay-as-you-go phone from an unidentified country but not thought to be Morocco, where a previous possible sighting of Madeleine was reported.

Although the caller did not reveal his identity or nationality, the information was considered important enough to alert Mr and Mrs McCann, the source said.

But all efforts to re-establish contact with the man failed.

Mr McCann later insisted there was a logic behind the trips they have made in the last week.

"We are not going to go to every country in Europe. We are not selling a book, we are not pop stars, we have come here for a very specific reason," he added.

Mrs McCann said: "We are amateurs in this. There are very few people who will have to go through anything as painful as this."

Pope meets parents of Madeleine

The parents of Madeleine McCann have met Pope Benedict in Rome and had a photograph of the abducted four-year-old blessed by him.

Kate and Gerry McCann, from Rothley in Leicestershire, spoke briefly to the Pope as he met selected worshippers after his weekly audience.

Afterwards, Mr McCann said the meeting had been a positive experience for him and his wife.

Madeleine disappeared during a family holiday in Portugal on 3 May.

Her parents, who are devout Catholics, flew to Rome from the Algarve resort of Praia da Luz in tycoon Sir Philip Green's private jet.

'Mixed emotions'

The general audience given by Pope Benedict XVI takes place every Wednesday and is held in St Peter's Square during the summer months. About 25,000 people were at the audience attended by the McCanns.

Mrs McCann showed the Pope a photograph of Madeleine when she met him, which he blessed. He put his hand on the arms of both parents during the emotional meeting.

In ordinary circumstances it would be a highlight for any Catholic to meet the Pope Gerry McCann

At a later press conference, Mr McCann said: "Today, meeting the Pontiff was an experience that has caused very mixed emotions for us.

"In ordinary circumstances it would be a highlight for any Catholic to meet the Pope. Of course it's saddened by the marked realisation that our daughter is still missing.

"We know people everywhere are praying for our daughter and that helps sustain our belief that we can get her back safely."

Mr McCann said the goodness that had been generated by "one evil act" had restored his faith.

The McCanns reiterated their appeal for information on Madeleine and urged people to visit their website, www.findmadeleine.com.

Height mistake

The McCanns, both 38, are staying at the residency of the British ambassador to the Holy See, Francis Campbell.

They have left their two-year-old twins in the Algarve with Mr McCann's sister, Trish Cameron, and her husband Sandy, deciding they were too young to take on the trip to Italy.

The couple are also due to visit Spain, the Netherlands, Morocco and Germany to raise awareness of their daughter's disappearance.

This week the family released the last video clips taken of their daughter before her abduction.

Meanwhile, Portuguese police have received hundreds of calls after they released a description of a man seen near the McCanns' holiday flat.

But the family said on Tuesday that police had got a crucial fact wrong in the description of the man.

Madeleine clips issued by parents

The parents of Madeleine McCann have released the last video clips taken of their daughter before her disappearance in Portugal nearly four weeks ago.

Dressed in pink and holding a rucksack, the four-year-old can be seen walking onto a flight at East Midlands Airport.

The mobile phone footage also shows her on an airport bus in the Algarve.

Gerry and Kate McCann are expected to begin a series of appeals across Europe after attending a general audience with the Pope on Wednesday.

The couple will have a few moments to talk to Pope Benedict XVI at the end of the audience.

They travelled to the resort of Praia da Luz on 28 April with Madeleine, her brother Sean and sister Amelie, and a group of friends.

Mrs McCann is said to have watched the two clips regularly since her daughter was abducted from their holiday apartment on 3 May.

"She was dead excited about going away with the rest of the kids, it was her first time to Portugal," Mrs McCann said.

"We all had to have our own rucksacks - even Sean and Amelie - it was quite funny. And Madeleine was acting like a big girl, she was so excited."

Inflatable billboard

The short clips were taken by one of the family's friends and show Madeleine boarding the flight to Faro airport and sitting on an airport bus with her brother and sister.

The McCanns thanked the public after viewing the poster

Madeleine can be seen clutching her Barbie rucksack and holding hands with another girl as she boards the aircraft.

At one point, she loses her footing and slips, grazing her shin.

Mr McCann said his daughter was so looking forward to her holiday to stay upset for long.

"She was really brave. She started crying but stopped almost immediately," he said.

"It was something that usually would have caused 10 minutes of crying rather than 10 seconds."

The release of the footage comes a day after a giant poster designed to publicise the appeal for Madeleine was unveiled on a beach at Praia da Luz.

Advertising business workers Chris Lennox and Les Harle, who brought the inflatable billboard from Scotland to Portugal by road, intend to set it up around the Algarve, Spain and other places in Europe.

Madeleine parents to see the Pope

The parents of four-year-old Madeleine McCann are set to visit the Pope to discuss the plight of their daughter, who vanished 24 days ago.

Gerry and Kate McCann are expected to attend a general audience at the Vatican on Wednesday.

Cardinal Cormac Murphy-O'Connor is helping arrange for the McCanns' visit.

Meanwhile, Portuguese police have received hundreds of calls after they released a description of a man seen near the McCanns' holiday flat.

MAN'S DESCRIPTION White 5ft 10ins Medium build Short hair Wearing a dark jacket, beige trousers and dark shoes Carrying "a child or an object that could have been taken as a child"

A spokesperson for Cardinal Murphy-O'Connor said: "The cardinal is conscious of the prayers of the entire Catholic community in this country for the McCann family at this distressing time.

"Having spoken to Dr Gerry McCann, the cardinal is facilitating the presence of the McCanns at an audience with the Holy Father as soon as is feasible.

"The cardinal also assured Dr McCann of his prayers for the safe release of Madeleine and for the rest of the family."

'Vague'

Portuguese police said they released the description of the man seen on the night Madeleine was taken from her family's apartment in the Algarve resort of Praia da Luz, to eliminate false leads.

He is described as white, 5ft 10ins, medium build with short hair.

It is understood the description came from a friend of the McCanns who saw a man who may have been carrying a child on the night Madeleine disappeared.

But Briton Robert Murat, the only official suspect in the case, has criticised the description for being too vague to rule him out.

Mr Murat said: "It isn't me. But the description is so vague that it won't put me out of the picture."

"I hope that I will soon be in a position to clear my name."

He denies any involvement in Madeleine's disappearance on the night of 3 May.

Mr Murat has been questioned by police but has not been charged.

'Terrifying moment'

Mrs McCann told how she and her husband cannot now bear to be parted from their two-year-old twins Sean and Amelie at night now and sleep with them in their bed.

Mrs McCann said: "They help us to get through this. We are a strong family and they were so close to Madeleine, only 20 months apart."

This photograph was taken the day before Madeleine disappeared

Mrs McCann, 38, described how the couple had struggled to have children and had waited five years for a baby.

When Madeleine arrived she was "absolutely everything" to them, she said.

Describing the "terrifying" moment Madeleine had been taken, she said: "You just don't expect in a million years that this could happen."

But Mr McCann said he still "truly believed" his daughter was alive.

A fund set up to help find her and highlight the issue of missing children, has now raised more than £320,000.

Madeleine's parents: 'The guilt will never leave us'

 

The McCanns during their interview: "I think at worst we were naive. We are very responsible parents, we love our children very much."

The parents of Madeleine McCann have said that the “guilt will never leave” them for the failure to prevent the abduction of their daughter.

Kate and Gerry McCann used their first interviews to talk about how they felt 22 days after their daughter disappeared while asleep at their Algarve holiday apartment.

 

The couple were at a restaurant less than 50 meters from the apartment where Madeleine and their two-year-old twins, Sean and Amelie, were sleeping in Praia da Luz.

Mrs McCann returned at 10pm to find that their four-year-old daughter had disappeared.

Mr McCann said: “I think it's fair to say the guilt we feel having not been there at that moment will never leave us.

“We’ve tried to rationalise things in our head but ultimately what’s done is done, we have tried to look forward. If you think about the millions and millions of British families who go to the Mediterranean each year, really the chances of this happening are in the order of 100 million to one.”

His wife, a GP, said: “We were checking regularly on the children and it was during one of my checks that I discovered she had gone.

“I can’t really go into any details about but I’m sure any parent will realise how that felt. “Certainly the first few days the guilt was very difficult but as time goes on we feel stronger and we felt very supported.

“I think at worst we were naive. We are very responsible parents, we love our children very much. I don't think any parent could ever imagine or consider anything like this happening.”

Mr McCann, a consultant cardiologist, said that he was convinced that the children were safely asleep in a ground floor apartment on the Ocean Club complex.

Parents vent frustration at ‘slow’ search for Madeleine

Portuguese detectives hunting Madeleine McCann have been provided with “several lines of inquiry” from photographs taken at the resort where she was abducted.

Hundreds of holidaymakers have sent pictures featuring strangers to the operation by British police to identify known sex offenders who were in Praia da Luz in the two weeks before Madeleine was taken from her bed. The images have been checked using a biometric facial recognition programme to compare them against a database of known paedophiles and other criminals.

However, Madeleine’s parents have indicated that they are growing increasingly frustrated with the failure of Portuguese police to find their daughter. As they released the last holiday photograph taken of the four-year-old, Kate and Gerry McCann are said to have become irritated by the slow pace of the inquiry.

It is the first time that they have expressed concerns about how detectives in the Algarve are handling the case.

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Multimedia

• Pictures: searching for Madeleine

Related Internet Links

• Bring Madeleine Home (official website)

A source close to the couple, from Rothley, Leicestershire, said: “They are getting concerned and frustrated at the apparent slowness of the Portuguese investigation.”

It is understood that among their concerns are that Portuguese police have to conduct their inquiries in secret, have abandoned the search and that detectives have not issued a high-profile appeal for help in tracing the girl.

Instead, Mr and Mrs McCann, both 38, have had to start their own campaign to raise awareness of the hunt for Madeleine; a campaign they plan to promote by visiting various European countries.

“Kate and Gerry are considering how they can move things forward themselves,” the source continued. “It’s fair to say that they are frustrated with the Portuguese system and the many delays that it causes. They want to do positive things in their search for Madeleine.”

It is thought that the couple have been annoyed by discovering more about the investigation from the media than from senior detectives.

Mrs McCann is believed to have been particularly concerned about reports that a possible sighting of her daughter in Morocco was not followed up by police for several days. A key chance to confirm the sighting at a petrol station in Marrakesh was missed because CCTV footage was wiped before it was checked by police.

Mari Olli, a Norwegian woman who lives in Spain, said that she was “very sure” it was Madeleine she saw on May 9 while on holiday in Morocco.

John McCann, Madeleine’s uncle, said: “I would still ask people to respond to the appeal for holiday photographs. We remain absolutely determined to explore all ways to get Madeleine back.”

It emerged yesterday that Portuguese police are now investigating an attempted abduction last December by a Moroccan man of a girl with a passing resemblance to Madeleine. Carolina Santos, 3, was led away from the front of her parents’ café in Fonte de Louseiron, 30 miles from Praia da Luz, on Christmas Day. Her mother, Lina, 28, said: “I searched, and saw her some way away on the road with a man I took to be Moroccan. We started towards them, shouting, and Carolina stopped and turned towards us. He disappeared around the bend.”

Mrs Santos reported the incident to police but was told they could not make a formal complaint as no crime had been committed.

Manuel Neto Quintas, the Roman Catholic Bishop of the Algarve, has offered to become a go-between with any kidnapper, saying he would make himself available if Madeleine’s abductor chose to contact him.

The year-long probe had widened in recent months to look into any attempt to pervert the course of justice.

Scotland Yard said that 136 people had been interviewed. They include Tony Blair and some of his closest aides.

The Crown Prosecution Service will now decide whether anyone should be charged. All involved deny wrongdoing.

'War on terror' sends wrong message, says Benn

Britain seeks EU support as second 'confession' is aired

Lord Levy wanted me to lie for him: Ruth Turner claim finally revealed

Stephen Wright was arrested on Tuesday morning at his home in the London Road area of the town.

He has been charged with murdering prostitutes Gemma Adams, 25, Anneli Alderton, 24, Tania Nicol, 19, Paula Clennell, 24, and Annette Nicholls, 29.

The first man arrested, Tom Stephens, 37, has been released on police bail pending further inquiries.

The Mail on Sunday claims the document was prepared for the prime minister by senior aides.

It suggests Labour should either unite behind Gordon Brown or pick a much younger new leader.

Deputy Prime Minister John Prescott dismissed the memo as the work of a "teenybopper" not a significant figure.

Public trust in Labour 'undermined by arrogance'

One of Tony Blair’s closest advisers has issued a devastating critique of the Prime Minister’s time in power, confessing that the Government’s arrogance undermined public trust.

Matthew Taylor, who was Downing Street chief of strategy until last Friday, has admitted that No 10 “liked the image of being brilliant media operators” and found it hard to make the transition from opposition to government in 1997. This meant that there was a “certain amount of creativity” with the truth when dealing with the media in the early years.

Mr Taylor, who is now chief executive of the Royal Society of Arts, also claimed that Mr Blair recognises that the invasion of Iraq has caused “a real problem” among Labour supporters.

In an interview on the BBC Two Newsnight programme last night, he said that the lack of middle-class pressure to improve the health service caused ministers to make mistakes, contrasting this with education, where parents were concerned that a Labour government may undermine standards. He said: “In education, when David Blunkett took over, there was a sense that we had to deal with middle-class fears, fears of aspiring working-class parents, that Labour was about levelling down, that policy was written by teachers’ trade unions, so we had something to prove.

“The way that we did that was we looked at elements of the Conservative package — league tables for schools, Ofsted — and said, ‘We’re going to keep that, we’re going to strengthen that . . .’

“I think in health, arguably, because we were under no pressure at all, there was a huge lead on health. We didn’t need to prove anything. Our thinking was not as strong as it could have been, and we did dismantle elements of the package that possibly we could have adapted.”

He admitted that the tensions between No 10 and the Treasury “were not nice” but said that creative differences ultimately created a better policy.

“What people misunderstand is that you will always get tensions between No 10 and the Treasury. And I think people sometimes mistook those sort of tensions to be part of what some people perceived to be a personal soap opera. And there is no question the Government suffered.

“My view is that the policy outcome, which was not necessarily a nice process to be sitting in the middle of — as Treasury officials and No 10 officials battled it out — was most probably right.”

On Iraq he said that Mr Blair was aware of the damage his actions had caused. “The Prime Minister himself recognises history will in the long term judge the action in Iraq. He knows it caused a real problem in relation to support amongst some of those people who would support a Labour government.”

Mr Taylor, who led the IPPR from 1999 until drawing up Labour’s 2005 manifesto, was also critical of the Downing Street spin machine in the early years, when he worked for Labour.

Labour may have broken electoral law by accepting low-interest loans

In a significant development in the cash-for-peerages investigation, the Electoral Commission revealed for the first time details of the terms of all outstanding loans taken out by political parties, including interest rates and repayment dates.

This showed that Labour procured loans of up to £2 million at interest rates as low as 6.5 per cent, without security for the lenders.

Opposition politicians and financial experts pointed out that such rates would not be available to high street customers, where unsecured loans are available only with at least an 8 per cent interest rate.

Scotland Yard detectives are investigating whether loans received at preferential rates were used to conceal the identities of donors, a potential breach of legislation introduced in 2000.

In a second blow for Labour, the party admitted yesterday that it had “acute cashflow problems” after new figures revealed that it is £23 million in debt and that large donations from individuals has almost dried up.

A Labour spokesman said that it would not be able to repay all its debts on the dates that they are due. The financial crisis has forced party chiefs to beg two businessmen not to call in their loans worth £1.5 million. But Sir Christopher Evans, the biotechnology millionaire, said that he wants his £1 million back within weeks. Gordon Crawford, had a £545,000 loan due on August 29 but has not yet been repaid. Figures from the Electoral Commission revealed that the political parties owe a total of £60 million in loans, with the Tories £35.3 million in debt and Liberal Democrats £1.1 million.

It is the first time that parties have had to declare loans.

Labour is under the greatest short-term pressure, with £5.5 million due to be repaid by the end of next month, followed by more than £11 million by November next year. It is understood that at least two lenders have offered to extend their loans after pleas from Labour officials.

The Times has learnt that the offers have been “put to one side” until police complete their investigations.

The new figures revealed the largest share of Labour’s donations from July to September came from the unions. They accounted for support worth £2,819,984, more than 87 per cent of the party’s £3,227,340 donations. Labour said that, contrary to reports, it had not withheld information from its auditors. It added: “All loans taken out by the Labour Party are commercial loans based on commercial rates of interest and arrangements.”

This was challenged by opposition politicians and financial experts. Lord Oakeshott of Seagrove Bay, a Liberal Democrat Treasury spokesman, said: “Labour now admit they paid only the same interest rate on unsecured loans from people, including four nominated for peerages, as on their bank loans which were substantially secured by a first mortgage on Labour’s properties.”

He said that if Labour defaulted on its mortgage payments, the bank would foreclose and get most of its money back. If Labour defaulted on its unsecured loans, the lenders would not get a penny.

Andrew Hagger, of MoneyFacts, a personal finance data analyst, said: “No bank in Britain would charge the same interest rate on those very different loans.”

The Tories face having to pay back £2.82 million by the end of December and almost £20 million by end of June.

Donations between July and September amounted to £168,259. A spokesman said that almost £16 million was spent buying the freehold of its former headquarters in Smith Square, which it was looking to sell.

Time to clear the decks in Downing Street

The decks are being cleared for the Blair-Brown transition. Tony Blair and Gordon Brown have a joint interest in resolving awkward issues: the former to improve his legacy, and the latter to ease his inheritance.

That is why Margaret Beckett’s remarks yesterday about a handover next spring in Basra to Iraqi forces was so intriguing. Her words were cautious: “The progress of our current operation in Basra gives us confidence we may be able to achieve transition in that province at some point next spring.”

She emphasised that there was no question of “cutting and running” and that it was all part of a gradual process that would still leave British troops in and around Basra.

But even without a fixed timetable, such a transfer of security responsibilities would be seen as a big step towards eventual British withdrawal.

It has always been silly to expect that, on becoming Prime Minister next summer, Mr Brown would suddenly announce a unilateral withdrawal of British troops, as José Luis Rodriguez Zapatero, the Spanish Prime Minister, did after the Socialists took office in spring 2004.

The British plan has always been to act in synchronisation with the Americans, hence Mr Blair’s desire to influence James Baker’s review, and to proceed gradually. But it would ease Mr Brown’s position if the British role had been reduced, or were being cut.

But this is only one example of where the Government is trying to tackle tricky issues. For instance, legislation was approved yesterday to allow fresh elections for the Northern Ireland Assembly and a revival of the executive by the end of next March.

Plenty could still go wrong but the timetable is clear.

Similarly, Mr Blair promised yesterday that a White Paper on nuclear deterrence, including the future of Trident, would be published before Christmas. That would lead to a Commons vote on the principle, probably early in the new year, even though many practical decisions will be left open.

A White Paper on the future of the Lords is due within weeks, followed by an attempt in the new year to see if, unlike 2003, there is a clear majority in the Commons on future composition. The review of party funding by Sir Hayden Phillips should be completed within a month, although probably without agreement. But at least Mr Brown’s options on both issues will be clearer.

Mr Brown himself is, however, responsible for the biggest domestic decision: the review that will set the rate of growth and the allocation of public spending for the next three years.

As Chancellor, he will determine his own inheritance, and freedom to manoeuvre, as prime minister. There will be a preliminary view in a fortnight in the Pre-Budget Report.

Add in the policy reviews, jointly launched by Mr Blair and Mr Brown a fortnight ago, which are due to report by next spring, and the intended timetable becomes even clearer.

There are, of course, wild cards, notably the police inquiry on loans for peerages. But the safest bet remains that Mr Blair will announce formally his intention to go on Friday, May 4, the day after the local elections. He will remain Prime Minister until a new leader and deputy are elected in late June, with Mr Brown taking over formally in about the first week of Wimbledon.

Deputy PM heads off critics as rivals eye job