FORMER chancellor Lord Denis Healey has died at the age of 98, his family have said.

The Labour peer served in Number 11 during the 1974-79 government and became the party's deputy leader in 1980.

He told the Echo in 1990 that Labour would have fared better in the 1980s if he had become leader.

Lord Healey died peacefully at his home in Sussex on Saturday morning after a short illness.

He was in Number 11 when the government was forced to go to the International Monetary Fund for a loan as the UK economy teetered on the brink of collapse in 1976.

He stood for the Labour leadership in 1980 but was narrowly beaten by Michael Foot.

He was elected deputy leader unopposed, but the following year he faced a challenge from Tony Benn.

The contest exposed sharp divisions in the party. In Bournemouth East, the constituency Labour party was evenly split on whether to back Benn or Healey, with chairman Norman Pankhurst using his casting vote in Healey’s favour.

Denis Healey came to Bournemouth in October 1990 to publicise the paperback of his memoir Time of My Life – at the same time the Conservatives were holding their conference at the BIC.

He spoke to the Daily Echo’s Andy Martin about the ‘winter of discontent’ which sealed the political fate of James Callaghan’s Labour government.

“It was a bad time when everything fell apart. One felt everything we had achieved in five years had all gone down the drain,” he said.

“That was mainly the fault of the unions but we were also to blame for insisting on too strict a pay policy. We lost touch with the grassroots and that’s always very dangerous.”

He said he regretted not being Labour leader, adding: “I think Labour would have done better if I had been elected leader and I would certainly have done a better job than Mrs T.”

The month after that interview, the former chancellor addressed the Association of Professional, Executive, Clerical and Computer Staff (Apex) at the BIC, predicting that Margaret Thatcher’s leadership problems would delay a general election until 1992. Later that month, Mrs Thatcher was forced to resign as prime minister.

Lord Healey also spoke to the Echo in 1990 about the rift between his supporters and those of Tony Benn. “One of the great tragedies of my life was that, because of Tony, we spent a decade fighting ourselves rather than the Tories,” he said.

In their later years, it was reported that the former rivals were reconciled after Mr Benn visited Lord Healey to advise him on how to cope with the loss of his wife Edna.

Labour leader Jeremy Corbyn said on Saturday: ''Denis Healey was a Labour giant whose record of service to party and country stands as his testament. All our thoughts are with his family.''

Chancellor George Osborne described his predecessor as a ''giant of the Labour movement''.