|PIC1|Foreign Secretary David Miliband called for a radical overhaul of Labour party politics on Wednesday, a move commentators interpreted as a potential challenge to the leadership of Prime Minister Gordon Brown.

Miliband, a youthful and energetic figure at the centre of the party, said Labour needed a "radical new phase" to revive its fortunes and claw back a 20-point deficit to the Conservatives in opinion polls.

He acknowledged some of the mistakes Labour had made during 11 years in power and said a shift was needed if the party was to overcome tough economic conditions and mount a challenge at the next election, due by May 2010.

"To get our message across, we must be more humble about our shortcomings but more compelling about our achievements," Miliband, 43, wrote in the Guardian newspaper.

"New Labour won three elections by offering real change, not just in policy but in the way we do politics. We must do so again."

It was the timing of the article as much as its substance that led political commentators and newspaper editors to interpret it as laying the ground for a possible challenge to Brown, who succeeded Tony Blair a little over a year ago.

An aide to Brown described the leadership talk as "midsummer madness" and said it would settle down in the coming months.

Brown, who took office without an election, has seen Labour's poll ratings slump to historic lows of around 25 percent as the impact of the global credit crisis and perceived mishandlings of policy have hit his popularity.

The loss of a once-safe Labour seat in an election in Scotland last week compounded Brown's woes, intensifying speculation in the media that a challenge to his leadership could be mounted in the coming months.

While the Times newspaper carried a banner headline reading "Miliband positions himself for leadership", others were more circumspect, although most saw the article as a bold move at a crucial time by a young and rising politician.

"DELIBERATELY AMBIVALENT"

In the piece, Miliband did not mention Brown once, instead focusing on where he thought Labour had gone wrong and could do better to quell the challenge from the Conservatives.

"With hindsight, we should have got on with reforming the National Health Service sooner. We needed better planning for how to win the peace in Iraq, not just win the war," he wrote.

"The modernisation of the Labour Party means pursuing traditional goals in a modern way."

Political analysts said the article appeared carefully written to tread around being directly interpreted as a leadership challenge while keeping its author in the frame.

"It's obviously written in a very coded way," Wyn Grant, a professor of politics at Warwick University, told Reuters.

"I think it's a deliberately ambivalent statement that could be seen as setting out an agenda for the future or as a something of a challenge," he said, although he remained sceptical about a leadership contest being mounted.

A senior Conservative official also told Reuters this week that the party was still expecting to face Brown in 2010.

While up to six senior Labour MPs, among them Miliband, have been mentioned as possible challengers, a contest is not straightforward. At least 70 Labour MPs would have to sign up to it, an extremely high threshold in itself.

Labour would also likely be reluctant to change leader again - for the second time in 18 months - without an election. Such a move would bolster Conservative calls for an election to be held right away rather than waiting until the 2010 deadline.

Politicians who argue for a change of leader say it needs to happen soon to give the party time to revive its fortunes - and hope for a turnaround in the economy in the next 18 months.