Reuters : Blair faces leadership crisis

Blair faces leadership crisis

By Kate Kelland | September 6, 2006

LONDON (Reuters) - Prime Minister Tony Blair faced a growing rebellion over his leadership on Wednesday after reports he planned to stay in office until mid-2007 prompted seven former loyalists to quit their posts.

A junior minister and six government aides, part of a group of once-loyal Labour MPs now calling for Blair to step aside, resigned saying an urgent change of leader was needed to revitalise the party's flagging fortunes.

The departures came the day newspapers reported that Blair planned to quit on July 26, 2007, after more than a decade in power -- effectively kick-starting a battle for leadership of his Labour Party and the country.

Chancellor Gordon Brown is widely expected to take over and several political figures urged the two to map out a plan to ensure a smooth transition of power and avoid months of government paralysis.

Other Labour members insist there must be a leadership contest pitting Brown against potential contenders such as Home Secretary John Reid, Education Secretary Alan Johnson and Environment Secretary David Miliband.

Two senior ministers and Blair allies have said this week the prime minister, who has suffered a dive in popularity at the polls, would be gone within a year.

The pound plunged to two-week lows against the dollar and the euro, with dealers blaming turbulence over the leadership and uncertainty over interest rates.

There has long been a vocal wing of hardline Labour left-wingers who have opposed Blair's move to the centre ground of British politics since he was first elected in 1997.

The latest doubters all first entered parliament in 2001 and have loyally backed the prime minister's reforms and policies. But now they fear that unless Blair goes, Labour will lose the next general election, expected in 2009.

"DISLOYAL, DISCOURTEOUS AND WRONG"

Junior Defence Minister Tom Watson was the highest ranking Labour MP to quit on Wednesday.

"I share the view of the overwhelming majority of the party and the country that the only way the party and the government can renew itself in office is urgently to renew its leadership," he said in a letter distributed to media.

But Blair immediately said he had planned to sack Watson anyway. He said Watson had been "disloyal, discourteous and wrong" in signing a letter, along with 14 other previously loyal members of parliament, calling for the prime minister to quit.

Blair, 53, winner of a record three consecutive elections for Labour, has seen his popularity slide after a series of government scandals over sleaze and mismanagement, as well as controversy over wars in Iraq and Lebanon.

Opinion polls put Labour well behind the Conservatives, who have been revived by their new youthful leader, David Cameron.

Newspapers splashed summer 2007 departure dates across their front pages, saying Blair had caved in to increasing pressure from Labour parliamentarians demanding a clear timetable.

The Sun said Blair would step down as Labour leader on May 31 -- less than a month after his 10th anniversary in office -- and resign as prime minister eight weeks later after an election to choose a party leader.

Blair's Downing Street office described the reports as "speculation" but did not deny them.

Blair won his first term on May 1, 1997. A decade in power would leave him more than a year short of Margaret Thatcher's record as the longest-serving leader in more than a century.

(Additional reporting by Deborah Haynes, Peter Graff, Kate Holton and Adrian Croft)

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