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Darling reveals Labour crisis row

The last Labour government failed to "come through" the financial crisis politically because of profound disagreements at "the very top", former chancellor Alistair Darling has said.

He and then prime minister Gordon Brown were so clearly at odds over economic policy that it damaged the party going into the 2010 general election, Mr Darling said.

In an interview with BBC1's Andrew Marr Show, he acknowledged that "perhaps" senior Labour politicians should have "done something" about Mr Brown's leadership, but added that he had a personal loyalty to the prime minister, going back many years, which stopped him from acting.

He said the Labour administration could have "charted a political way through" the problems that were thrown up by the banking meltdown and subsequent recession.

"We could have come through this. We didn't because there was a disagreement at the very top," he said.

The two men's views diverged in 2008 when they disagreed fundamentally on the scale of the crisis. Mr Brown felt the economy would recover within six months and that Mr Darling's gloomier expectations were "too cautious" and an exaggeration based on misleading advice.

"You need to be united at the top but you also need a credible economic policy," Mr Darling said. "If you don't have a credible economic policy you are simply not at the races, and our problem was it was so blindingly obvious to the outside world that the two of us - Gordon and myself - were at odds that it really hampered us when it came to the election in 2010."

Mr Darling said it was "very unpleasant" for him because of his long-standing friendship with Mr Brown. "If you want to criticise us collectively perhaps we should have done something but... I'm afraid, for me, despite everything and if Gordon's listening to this he may find it difficult to believe, but I had a residual loyalty which I found it difficult to overcome. We go back a long, long way. This whole thing was very unpleasant."

Mr Darling, who was appointed chancellor when Mr Brown became prime minister in 2007, said that an anonymous briefing against him by Brownites had "left a mark" on him. He has previously spoken of the "forces of hell" being unleashed against him by Mr Brown at the height of the financial crisis.

The episode, in which Mr Darling's handling and analysis of the crisis was criticised by Labour insiders speaking to journalists off-the-record, was "deeply unpleasant", the former chancellor said. "What is so debilitating is when your own lot are doing it to you. It's not exactly new in politics but it left a mark on me that you really can't erase," he added.

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