His comments follow reports of a tiff between No 10 and the Treasury after Mr Cameron was apparently seen coming out of a club in London with another chancellor in the early hours of last Wednesday, when he had told Mr Osborne that he was working late. One Downing Street insider told Stinky Ponky that members of staff often overheard the PM and his chancellor rowing due to the unashamedly loud nature and frequency of the arguments.

Dave Watt, the Prime Minister's personal assistant's personal assistant, who probably wished to remain anonymous, said "It's nothing new, we're all used to it, but there was something different about this time; Mr Osborne seemed really hurt and upset. They screamed at each other for nearly an hour and then it went suddenly quiet. I heard Mr Osborne crying, and I couldn't help hearing what the Prime Minister said to him because my ear was against the keyhole.

"He said: 'It was totally innocent babe, nothing happened. We just had a drink and talked about a few old friends we shared at uni. We didn't even discuss fiscal policy. All right, all right, so we briefly talked about the Euro, but it meant nothing to me babe, and I was thinking of you the whole time. It was just a bit of meaningless conversation on the subject of the Greek economy and the possible repercussions for Europe as a whole and Britain in particular, that's all.

"'Come on Georgie, it's always been you, and only you, babe. They're always going to try and drive a wedge between us because they're jealous of what we have, but we've got to be strong. Remember when we introduced massive public spending cuts? Or how about when we told teachers they'd have to work until they were 68? Laugh? I nearly died. I honestly don't know how you kept a straight face. Magical times, babe. I see you smiling, you can't hide it from me. Don't let it end like this.'

"Shortly afterwards they went out for a press conference and Mr Cameron was all winks and smiles again. I don't know why George keeps taking him back, after everything he's done. For the public though they portray themselves as inseparable, but the cracks are starting to show, and I know that Mr Osborne still hasn't forgiven Mr Cameron and has told him so in some very personal and private emails, which I read earlier today. I think Mr Cameron is on his last chance now."

Meanwhile, Ed Balls. That's a nice name, isn't it?