Gordon Brown suffered a wounding double blow to his authority as he abandoned moves to sell a stake in Royal Mail and was defeated by Labour rebels over plans to clean up the Commons after the expenses scandal.
The fresh setbacks came after he endured bruising clashes with David Cameron over spending plans and faced ridicule from Tory MPs after he spoke of a “zero per cent rise” in budgets.
The retreat over part-privatisation of the Royal Mail was blamed by Lord Mandelson, the Business Secretary, on the struggle to attract buyers in the recession. But the opposition parties claimed the climbdown had been forced by the growing opposition to the sale among Labour MPs and trade unions.