Labour favourite and North-East MP Mo Mowlam yesterday ended months of rumours over her future and announced that she is to leave front-line politics.

But last night the reasons behind her decision remained the subject of intense speculation.

The Redcar MP said she would stand down at the next General Election but would stay on in her Cabinet Office post until then.

She insisted she had not been forced out by a long-running whispering campaign and revealed that Tony Blair had asked her to stay on.

Dr Mowlam, 50, who recovered from a benign brain tumour in 1997, claimed her health was no problem and declared that she was ''fine and dandy''.

She said she had taken a ''personal decision'' to pursue a political career outside Parliament, potentially working on the fight against drugs and poverty and in international affairs.

''This is my decision. It's nothing to do with British politics. It's nothing to do with Tony Blair and Number 10,'' said Dr Mowlam, who revealed her decision after a 15-minute meeting with the Prime Minister yesterday.

A Downing Street spokesman underlined Mr Blair's admiration for her, saying she would be ''a great loss to the Government and a great loss to Parliament''.

Last night, Labour politicians and activists in the North-East reacted with dismay to her decision.

Dari Taylor, MP for Stockton South, described Dr Mowlam's decision as ''an awful moment for Labour politics.

''We are losing an incredibly good politician and an incredibly good woman politician.''

John McCormack, Labour constituency chairman in Redcar, said that the news was ''absolutely devastating and is a great blow for the people of Redcar''. And he warned the party leadership not to try to ''parachute in'' a New Labour placeman to take her seat.

Dr Mowlam, MP for Redcar since 1987, has topped Labour popularity stakes - not least for her performance as Northern Ireland Secretary in the peace process after the 1997 election.

She won a standing ovation at the 1998 Labour Party conference in Blackpool, merely when Mr Blair mentioned her name.

But after Hartlepool MP Peter Mandelson replaced her in Northern Ireland last year, she was effectively demoted to Cabinet Office Minister.

And unattributed briefings suggesting she was no longer up to the job began, with some suspicion falling on Downing Street and Mr Mandelson, although both have vigorously denied the claims.

There were also suggestions that in last year's reshuffle, she had wanted to become Health Secretary - a post won instead by Darlington MP Alan Milburn.

But yesterday, Dr Mowlam said: ''I did not want that job. I got the job I wanted.''

She attacked the briefings against her but insisted she had not given in to them. ''I have had whispering campaigns for rather a long time and if I'd listened to them, I would not be here now,'' she said.

Mr Mandelson yesterday paid generous tribute to Dr Mowlam, describing her as a ''one-off'' who would be ''greatly missed''.

Closing the door - Page