JOHN Prescott will be stripped of his campaigning role and ordered to concentrate on ''user-friendly'' transport policy initiatives as part of a Government reshuffle aimed at focusing Labour on the next General Election.

The Deputy Prime Minister has emerged from a bruising encounter with Tony Blair, determined to counter complaints that his massive department is failing to get to grips with the crisis in public transport.

As senior Ministers called yesterday for party unity and insisted there was not a ''cigarette paper'' between Mr Prescott and the Prime Minister, attention focused on likely changes in Labour's elections machine.

Mr Prescott will surrender responsibility for the back bench campaigning team he has headed since before 1997, amid private complaints from Downing Street that he has not done enough to tackle public concerns about transport.

In what is being portrayed by both sides as an agreed change in role, Mr Blair's deputy will stand down from formal campaigning duties as part of the reshuffle this month.

But Government sources stressed that there was ''no question'' of breaking up the Department of the Environment, Trans-

port and the Regions to create a separate Transport fiefdom for a loyal Blairite.

Although there is growing consensus that Mr Prescott's department is unwieldy and his failure to deliver results is attributable to his workload, such a change is considered too much for the midway point of a Parliament.

The Prime Minister's official spokesman described the suggestion in a Sunday newspaper as ''100% fabrication''. He said: ''It was not, is not and never has been the intention of the Prime Minister to strip transport out of the Department of Environment, Transport and the Regions.''

Mr Blair and Mr Prescott spent the weekend publicly patching up their relationship after their disagreement last week - since blamed on Mr Blair's Kosovo and Ulster-induced exhaustion - on the role of the public sector.

Mr Blair caused consternation when he hit out at public workers reluctant to embrace change, claiming he ''bore scars'' from his battles with the unions.

Mr Prescott hit back angrily, praising the public sector for its contribution to British civilisation and said he was glad to ''get it off my chest''.

But Trade and Industry Secretary Stephen Byers said yesterday that people ''couldn't put a cigarette paper'' between their comments. ''I read very carefully both what the Prime Minister said and the Deputy Prime Minister said and it was exactly the same.

''What they were both saying was that they value public service but there is a need to modernise and reform those public services.''

Mr Byers also warned Labour activists to keep their discipline if they wanted to win the next General Election. He told a Labour rally in Scarborough: ''Halfway through a Parliament can be the most difficult time for a government.

''Unity and discipline are vital. We must maintain our common purpose and be clear about our objectives as we build up to the next election. We must consolidate our partnership with the British people. We must keep together that unique, historic coalition that took us to power in 1997.''