With opposition politicians continuing to call for a parliamentary inquiry into the circumstances surrounding the release of Abdelbaset Ali Mohmed al Megrahi, the Prime Minister is coming under increasing pressure as the Labour Party gears up for its autumn conference later this month in Brighton.

Thus far, Mr Brown has steadfastly refused to express a view on the Libyan’s release. However, while David Miliband, the Foreign Secretary, said the UK Government did not want Megrahi to die in jail, this week Ed Balls, the Schools Secretary, claimed ministers did not want him released.

Yesterday, one unnamed cabinet minister was quoted as saying: “We can’t go on like this. It’s beyond difficult; it’s farcical. We’re going from one fiasco to another and government by fiasco doesn’t work. I’ve never been a plotter but I feel total exasperation.”

A government aide, said to have been closely involved in the Megrahi case, dismissed the handling of it as “a mess”, adding: “I suspect it will be held up as a model for future students in how not to deal with a crisis.”

In Downing Street, Mr Brown’s spokesman brushed aside the negative talk, saying: “The Prime Minister feels he made a full statement at the right time and it’s important he said as much as he wanted to say at that stage.”

He added that Mr Brown was concentrating on the main issues of the day such as Afghanistan and the forthcoming G20 summit in Pittsburgh, pointing out how yesterday he was chairing two cabinet committees. The government, he insisted, was “back in business”.

Yet rumblings are again emerging about a possible challenge to Mr Brown’s leadership, although there appears to be no organised rebellion.

Jon Cruddas MP, a prominent left winger, claimed his party was “meekly accepting” it would lose the next election and called for Labour to fight back with a shift to the left.

With the polls continuing to give David Cameron’s Conservatives a double-digit lead, the London MP argued that Labour was doing nothing to counter it.

“Our lack of story and radicalism means we appear paralysed by a form of defeatism, of meekly accepting imminent Tory victory,” he said.

Meanwhile, the Scottish Tories picked up on reports that Justice Secretary Kenny MacAskill’s brother, Allan, has a background in the oil industry with BP and now works for an Aberdeen-based wind energy firm.

Annabel Goldie, the Conservative leader at Holyrood, decried the “constant drip, drip of information” and noted: “If any part of Mr Salmond’s government has any connections to Libyan businesses, then they need to come clean.”

However, a spokesman for the Justice Secretary dismissed the Tory remarks as “ridiculous, confused and entirely without foundation”.

In a separate development, Labour’s Jack McConnell, the former First Minister, expressed surprise that the Megrahi decision was made “without open discussion between ministers in Edinburgh and London”.

A Scottish Government spokesman responded by saying “extensive attempts” were made to seek clarity from the UK Government over any commitments made on the prisoner-transfer agreement but that consideration of release on compassionate grounds was entirely a matter for Mr MacAskill.

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