LONDON - BRITISH Prime Minister Gordon Brown's ruling Labour party is planning to hold a by-election on July 23 after the incumbent MP stepped down following criticism over his expenses, media reports said on Monday.

The vote in the parliamentary seat of Norwich North in eastern England will be a test of Labour's support as it attempts to move past dismal results in European and local elections last month and a crisis over Brown's leadership.

The BBC and the domestic Press Association news agency said the vote would likely be set for July 23. Labour was not immediately available for comment.

Labour MP Ian Gibson quit after the party banned him from standing for them at the next election because of criticism of his expenses. He held a 5,459 majority over the main opposition Conservatives in the last vote in 2005.

Mr Brown unveiled a new package of policies on Monday designed to help re-engage voters disillusioned with the 12-year-old Labour government, the recession and criticism from within Labour of the prime minister's leadership.

He set out his government's legislative programme for the coming months, including measures on public services, training for young people and house-building, ahead of a general election that must be held by June 2010.

A new opinion poll suggested the Conservatives' months-long lead over Labour is narrowing, but they are still the favourites to form the next government.

The ComRes poll for The Independent newspaper put the Conservatives on 36 percent, down two points on last month. Labour were up three on 25 per cent, while the third opposition Liberal Democrat party were down one on 19 per cent.

ComRest interviewed 1,007 adults by telephone on June 26-28. -- AFP