good examination of what's happening for america's favorite ally http://www.msnbc.msn.com/id/6099940/site/newsweek/ A Question of When Tony Blair prepares to go for his third term. After that, does he step aside? By Stryker McGuire Newsweek International Oct. 4 issue - Nine words you will never hear at 10 Downing Street: "I hope to go on and on and on." On a political high in 1987, Margaret Thatcher made the mistake of uttering them, and three years later she was gone. In the halcyon days of his own premiership, in 1999, Tony Blair made a point of saying, "I have never said that I'm going to serve three terms. I have never said I want to be like Mrs. Thatcher and go on and on and on." And yet here he is. Blair has a world of troubles over Iraq. Last week he could only listen in stoic agony to the plea of a British hostage threatened with beheading, Kenneth Bigley: "I need you to help me now, Mr. Blair." Still, the prime minister remains electorally strong. The opposition Conservative Party, or at least its remnants, is a damp squib. The unofficial opposition, the anti-Blair press, is a constant nettle, but not much more than that. All this gives Blair a clear shot at something no Labour prime minister has ever attained: a third term. As his Labour Party gathers for its annual conference this week to prepare for next year's election, delegates will argue over issues from Iraq to public services. But one question overrides all others: how long will Blair go on, and who will succeed him? Britain's political class has long thought it knew the answer. After about two years into a third term, Blair would step aside in favor of his chancellor of the exchequer, Gordon Brown. But recent events have shaken assumptions. First, news stories surfaced that Blair had reneged on a deal cut last autumn to step aside this year. Then in a cabinet reshuffle three weeks ago, Blair dramatically raised the profile of one of his proteges, Alan Milburn, renowned for his clashes with Brown. Blairites and Brownites lunged at each other's throats. Suddenly, there was blood in the water of British politics. The Tony Blair-Gordon Brown melodramathe "TBGBs" in the parlance of the London paperswas a fixture of British politics even before Labour's landslide victory in 1997. But the media's obsession with the surface chaos obscures a central fact about this Labour government after more than seven years in office: strained as it may be, the Blair-Brown joint venture is the most durable partnership of its kind since World War II, and certainly one of the most successful pairings in the history of British government. The TBGB soap opera also clouds the succession issue. For all the political machinations and intraparty warfare, Brown remains the best bet to succeed Blair. A more fundamental issue is what a Brown government would mean for Labour policies at home and abroad. Would Prime Minister Gordon Brown be "Blair mark two," as the aspiring Conservative MP Michael Gove asserts in Prospect magazine, or would he steer Labour closer to its traditional socialist roots, as Madsen Pirie of the Adam Smith Institute believes? Like Blair, Brown is a modernizer. They have been at the forefront of Labour Party reforms for two decades. Together they have designed the big policy initiatives that have seen Labour through two successful elections and to the brink of a third. "Don't forget," says a source close to Brown. "Blair wants Brown to succeed him as a Blairite prime minister. And Brown wants to succeed Blair as a Blairite prime minister." Both men got a taste of Labour's failings when they were elected to Parliament in 1983. Having witnessed the party's humiliation by Thatcher's Tories in 1979, they became part of the vanguard that would revamp the party over the next decadesevering its union ties, wrenching it away from the welfare state and toward free markets, and ditching its tax-and-spend image in favor of a new business-friendly profile. By 1994, Brown and Blair were both well poised to take over the party when its leader, John Smith, died. As part of a supposed deal done at a trendy North London restaurant, Brown stepped aside in favor of the slicker, more nakedly ambitiousand more electableBlair. The quid pro quo: if Blair became prime minister, as he did in 1997, he would at some point cede the job to Brown. That, according to Labour lore, was Deal No. 1 in the Blair-Brown partnership. Deal No. 2 supposedly came along late last year. In September 2003, Blair had canceled his regular private meetings with the chancellor. Blair was politically wounded at the time. The war, the postwar, the failure to find WMD in Iraqthese things had turned the British public against him. Several key votes on domestic issues were coming up, along with further evidence poking holes in the WMD claims that were Blair's casus belli in Iraq. Scenting Blair's weakness, some Brown partisans urged their man to make a move. He didn't, but relations deteriorated. Deputy Prime Minister John Prescott, Blair's gruff but affable conduit to the "old Labour" wing of his party, arranged a peacemaking dinner between Blair and Brown. Only the three principals were there, but that hasn't precluded murky, even contradictory accounts of the dinner from emerging. In the most fabulist telling, a distraught Blair seeks Brown's support over the next several troublesome months. The quid pro quo: Blair promises to step down in 2004 and make way for Brown. Sound familiar? Sources close to Blair and Brown tell NEWSWEEK that while there is some truth to the accounts of Deals 1 and 2, both have been exploited by the two sides. "People hear what they want to hear," says a source with lines into both camps, adding that Blair has been "stringing [Brown] along." Another source says, "All of Blair's body language tells me he's not going any time soon. Do you think he'd be drawing up five-year plans if he was on the way out?" By giving a cabinet seat to Alan Milburn (as the honorific chancellor of the Duchy of Lancaster) and putting him in charge of the upcoming election campaign, Blair made it clear he was remaining very much in chargeand that Brown must wait his turn. With either man, New Labour will carry on. But they are not ideological twins. Blair believes the way you improve public serv-ices is to restructure them, foster competition and involve the private sector if need be. Brown believes you can improve services by linking funding to measurable goals and objectives. Somewhat simplistically, Blair's acolytes are seen as "transformers"radical modernizersand Brownites as "consolidators" of Labour fundamentals like wealth redistribution. Yet both camps know that the support of "Middle England" and the business establishment is essential to remaining electable. So how long will Blair go on? The conventional wisdom is that Blair will lead his party into the next election, which he is expected to call for May or June of 2005. Then he will lead the campaign for a yes vote on the draft European Union constitutional treaty in a referendum, probably in 2006. Win or lose on Europe, Blair will then step down to make way for Brown, perhaps around the time of the 10th anniversary of Labour's historic May 1997 election win. There's the X factor, however, that could change everything: Iraq. The war and its aftermath, as last week's hostage drama made so excruciatingly clear, cast long shadows across Blair's government. Mostly because of Iraq, he has for the first time contemplated resigning. A number of times last year, he told close associates and senior journalists that he would step aside if he became a more serious electoral liability to his party than he already is. For now, that remains an unlikely prospectthough worryingly for Blair, a MORI poll released last weekend shows his dissatisfaction rating among likely voters remains at about 60 percent, where it has been for a year. If Britons voted today, according to MORI, Labour's majority in Parliament would drop from 160 seats to 24. Labour Party polls show that voters resent the amount of time Blair devotes to foreign affairs. The P.M. implicitly addressed these problems in a recent speech to trade unionists: "Even if I've never been away, it's time to show I'm back." That may be. But his party, his country and his chancellor still wonder: for how long? With Emily Flynn and Peter Snowdon © 2004 Newsweek, Inc.