London, July 25: Tony Blair's office dismissed today a BBC report that the Prime Minister's top media adviser will resign, as it continued a spat with the state broadcaster centering on claims the government exaggerated the threat posed by Iraq's alleged weapons of mass destruction. The resignation of Alastair Campbell, Blair's communications director, was predicted yesterday in a report by the BBC's respected political editor Andrew Marr, but was hotly denied by Downing Street.

"This is wishful thinking on behalf of the BBC. The BBC political editor (Marr) has not spoken to Alastair Campbell about this," a downing street spokesman said.

"It is the latest example of the BBC focusing on gossip rather than substance," the spokesman said. The clash came as Blair faced his worst-ever political crisis in the fallout from the apparent suicide of British arms expert David Kelly, the source of earlier BBC reports that Campbell had spiced up the intelligence on Iraq.

Blair's chief "spin doctor" has repeatedly denied inserting into the September dossier a claim that Iraq could launch weapons of mass destruction within 45 minutes.

A parliamentary probe also cleared Campbell of exerting "improper influence" in the drafting of the file.

Marr told BBC news yesterday evening that he was "pretty sure" Campbell had decided he was going to leave downing street and had informed Blair of his intention to resign after the present political storm dies down. Following Downing Street's denial, the BBC issued a statement sticking by Marr's report.

Bureau Report