Sept. 25 (Bloomberg) -- Prime Minister Tony Blair's wife, Cherie, suggested during a speech by U.K. Chancellor of the Exchequer Gordon Brown that his account of his relationship with her husband was ``a lie.''

Cherie Blair left the conference hall with her security detail as Brown was speaking to the Labour Party conference in Manchester, England today. As she walked through a display area outside the auditorium, Brown was on television monitors, extolling the strength and achievements of his political relationship with Blair. ``Well, that's a lie,'' she said, apparently unaware that she was within earshot of a Bloomberg News journalist.

A spokesman for Blair said the account of his wife's comment ``is completely untrue. Mrs. Blair was going round the stalls at the conference center when the chancellor began speaking, and she went immediately to the stall organizer's office to watch the remainder of the speech on TV. She certainly didn't say that.''

Cherie Blair later also spoke to reporters in Manchester to deny the statement. ``Honestly guys, I hate to spoil your story, but I didn't say it and I don't believe it either,'' she said.

Brown's speech came at a time of deep divisions within the ruling Labour Party between those who want him to succeed Blair and those who accuse him of plotting to undermine the prime minister's leadership.

Differences

The remark by Cherie Blair, a 52-year-old human-rights lawyer, may undermine efforts by both the prime minister and chancellor to smooth over their differences before Blair, 53, surrenders the party leadership and the premiership, which he says he'll do within the next year.

The prime minister would have been hoping that this, his final party conference as leader, would have allowed him a triumphant exit as the most successful Labour prime minister ever, said Philip Cowley, professor of politics at Nottingham University.

``This is something they've all been trying to avoid,'' Cowley said in a telephone interview. ``They would have hoped for a Frank Sinatra-style exit, singing `My Way.' One careless remark seems to threaten to blow that apart.''

Cherie Blair's remark was not a surprise, said Thomas Quinn, a lecturer in government at Essex University.

``It fits into what we already know,'' Quinn said in a telephone interview. ``Newspapers have said that she has told Blair she didn't want Brown to take over.''

Election Wins

The debate over when and how Blair should hand over power has obscured discussion of policy issues within Labour since the last election in May 2005. Blair has been in charge of the Labour Party for 12 years and won three general elections since Brown stood aside in 1994 to give him a clear run at the leadership.

Since September 2004, when Blair announced he didn't want to fight a fourth election, there had been speculation among Labour lawmakers and in the British media about the exact date of his retirement. Until earlier this month, Blair had refused to set any timetable for his departure.

That refusal, reaffirmed in an interview on Sept. 1 with the Times newspaper of London following his summer vacation, led supporters of Brown, 55, to press for Blair's immediate resignation. On Sept. 6, eight junior members of the government quit their posts, saying Blair was a liability to the government.

Smiling

The next day, the prime minister made an appearance outside a school in north London to announce he would quit within the next year. Brown was pictured in the Financial Times and Daily Telegraph newspapers smiling following meetings he had with Blair, prompting accusations Brown had a hand in the plot to win the promise from the prime minister.

Since then, Blair and Brown have attempted to paper over their rift, expressing support for each other and pledging an orderly transition of power. Blair has said he'll name an exact date at a later time. Brown said he backs that plan.

Brown, facing a slump in Labour's opinion-poll ratings, told activists today that he is the best man to defeat a resurgent Conservative Party.

Brown's speech was intended to defuse questions raised by former Cabinet ministers including Charles Clarke, who said this month that the chancellor is a ``control freak'' who forced Blair to make a public promise to step down within a year. Cabinet ministers including John Reid and Alan Johnson have suggested they may challenge Brown for the leadership.

An opinion poll by YouGov Plc showed 27 percent of voters said Brown will make a good prime minister, down from 36 percent in March. Labour trails the Conservatives by 31 percent to 38 percent. The survey of 1,734 adults was conducted between Sept. 19 and Sept. 22. No margin of error was given.

Today, Brown praised Blair and said he would stick with changes to the party put in place since Blair became leader in 1994. He said he and Blair put disagreements behind them, aiming to focus the party on winning another election.

To contact the reporters on this story: Carolin Lotter in Manchester, England at cheinrich@bloomberg.net; Robert Hutton in Manchester, England at rhutton1@bloomberg.net.

Last Updated: September 25, 2006 14:33 EDT