Prime Minister Jean Chrétien threw down the gauntlet to Finance Minister Paul Martin yesterday, ordering his leadership rival to shut down his campaign organization and fundraising efforts.

In a tense cabinet meeting, Mr. Chrétien confronted Mr. Martin and other leadership hopefuls and told them their underground campaigns are tearing the party apart and must end, cabinet sources said.

"He said, 'I'm going to serve out my mandate,' " a source told The Globe and Mail. "He said, 'There will be a [leadership] review at the biennial [convention in February.]' He said, 'I want an immediate stop to leadership campaigns and fundraising.' "

Mr. Chrétien also demanded the support and loyalty of all his cabinet, staring at Mr. Martin as he did so, a senior Liberal source told CTV News.

The Finance Minister sat stone-faced through the entire confrontation, the source said.

Mr. Chrétien told his cabinet he believed that at least some of the damaging leaks which have contributed to the government's ethics problems were related to the leadership race.

The government has been under fire over sponsorships that the government used to raise its profile, particularly in Quebec after the 1995 referendum.

In a speech to about 750 Liberals at a fundraising dinner in Winnipeg last night, Mr. Chrétien defended the Liberals' efforts to keep the country united.

"Perhaps there were a few million dollars that might have been stolen in the process, but how many millions of millions of dollars have we saved because we have re-established the stability of Canada by keeping it a united country?" he asked the crowd.

He added that if money had been stolen, the people responsible would face the courts.

The Finance Minister has long insisted that he has no intention of challenging Mr. Chrétien at the leadership review, which under the Liberal Party constitution must be held at February's policy convention.

However, Mr. Martin has reserved the right to organize for an eventual leadership race, including fundraising and organizing delegates for the policy convention. Mr. Chrétien's supporters have viewed that effort as a direct challenge to the Prime Minister's leadership, arguing that a convention packed with Martin supporters is unlikely to give Mr. Chrétien a ringing endorsement.

Now, the Finance Minister must respond to the Prime Minister's directive. He can resign and challenge the Prime Minister directly in the leadership review, defy Mr. Chrétien and continue to actively build support within the party, or stop the organizing while quietly encouraging the party grassroots to deliver Mr. Chrétien a clear message that he should not lead the Liberals into a fourth election.

Mr. Chrétien has suggested that he would go through the leadership review, then decide whether to try for a fourth mandate.

A Martin strategist suggested that the Finance Minister will continue to enjoy broad support within the party and will continue to position himself as the logical successor to Mr. Chrétien.

"A campaign for the leadership of the party is not a direct attack on Jean Chrétien,"' he said.

He also noted that, until recently, Mr. Chrétien not only tolerated leadership campaigning but actively encouraged people such as former industry minister Brian Tobin, Canadian Heritage Minister Sheila Copps and Deputy Prime Minister John Manley to launch bids.

"This would be a dramatic about-face," said the Martin source, who had not been briefed on the cabinet discussion.

The Prime Minister has clearly been stung by the internal leadership battles and perceived efforts to undermine him. In addition to Mr. Martin, Industry Minister Allan Rock has been actively organizing a leadership campaign for years, while Ms. Copps and Mr. Manley are now testing the water.

And many Liberals blame rival camps for a succession of leaks that have embarrassed cabinet ministers over alleged conflict of interest.

Mr. Chrétien was still plainly angry after the cabinet session yesterday, telling reporters that whistle-blowers will face dire consequences if their identities become known.

Finger-pointing has become commonplace. Mr. Chrétien's supporters blame Mr. Martin's team for damaging stories about Immigration Minister Denis Coderre and Justice Minister Martin Cauchon, the Prime Minister's two main organizers in Quebec.

The PM's verbal warning

Prime Minister Jean Chrétien says whistle-blowers will be in big trouble if he finds out who they are.

Q: Prime Minister, do you think any of these leaks of some of these alleged-corruption stories is an attempt, internally, within the party, to undermine you and put pressure on you to quit?

A: If you want to have a good story, give me the names of the guys who are leaking to you and you will have a great story. So, if you are lacking things for your headlines, give me the names. You will have a lot of fireworks and you will have very easy stories for many months to come.

And you know me, I love fights. And I would like to have the name of the people who are, you know, double-crossing the rest of the caucus and the cabinet.

Q: What would you do to them?

A: Give me a name and you'll have your answer right away.

Q: So where do you think it is coming from?

A: I don't know, tell me.

Q: Bureaucrats? Or . . .

A: Bureaucrats? Give me the names of the bureaucrats too who would do that.

Q: Don't you know where it is coming from?

A: No.

Q: Do you have any suspicions?

A: I don't pass judgments without having the facts. I'm not like some of you. So give me the facts and I will pass the judgment. And I'm hoping you will give me the name. You will have a lot of good stuff on TV. Thank you very much.

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