Downing Street last night moved to end the privacy row over a picture of baby Leo Blair by saying it held no grudge against The Northern Echo.

The photograph, published on our front page on Saturday, had sparked a national controversy.

It was taken by a teacher at St John's Roman Catholic Comprehensive School in Bishop Auckland, County Durham, and submitted for a schools page.

The picture sparked worldwide interest beauce the school had scooped the media, with the occasion billed as Leo's first public engagement.

But Downing Street initially reacted angrily and warned other newspapers the photograph should not be used.

Last night, the Prime Minister's official spokesman said: ''The Prime Minister understands why members of the public may want to take pictures of Cherie and the baby at events like this.

''He also understands why The Northern Echo felt this would be a perfectly innocent local picture story and holds no grudge against the paper whatsoever.

''But, as the paper's editor said this morning, this is a picture that would have been of interest to press all round this country and all round the world, and it is that mass exposure that the Blairs are keen to stop happening."