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British Prime Minister Blair announces he'll leave
By Steve Goldstein, MarketWatch
Last Update: 7:57 AM ET May 10, 2007
LONDON (MarketWatch) -- British Prime Minister Tony Blair on Thursday said he's leaving after ten years of power, setting the stage to put the country in the hands of his long-time partner -- and rival -- Gordon Brown.
Blair, in an expected move, told his local constituents in Sedgefield that he'll resign on June 27.
"In this job, in the world today, I think that is long enough for me, but more especially for the country," he said.
Blair is stepping down with dwindling popularity -- according to a recent poll from YouGov, only 22% of the U.K. electorate trust him, down from 63% when he ousted John Major.
Last week, the separatist Scottish National Party defeated Blair's Labour Party in local elections, with his party losing power in Scotland for the first time in a half century.
Part of his unpopularity stems from British involvement in the Iraq war, which was deeply unpopular at the start of the campaign. Blair was criticized for allegedly being U.S. President George W. Bush's "poodle," according to a popular lament here in the United Kingdom.
"I may have been wrong. That's your call," Blair said. "But believe one thing if nothing else, I did what I thought was right for my country."
But that's not the only reason for Blair's waning popularity.
After promising to be "purer than pure," Blair has been involved in a number of scandals, including one where he allegedly tried to award positions in the House of Lords in return for campaign contributions.
Police have investigated those charges and interviewed Blair, though they have never referred to Blair as a suspect.
Blair has also had a rocky relationship with his own Labour Party, as he pursued policies such as hiking university tuition fees and introducing private-public partnerships in a variety of services, notably transport. See more global markets coverage.
Surging spending on the country's National Health Service hasn't made much of a mark on the popularity of the health care, though Blair says that by key measurements, such as waiting times, performance has improved.
In his speech on Thursday, Blair listed domestic achievements as better employment, more jobs, better health and education and lower crime.
According to a government statement, Brown at a cabinet meeting early on Thursday applauded Blair for his achievements over the last 10 years and the unique leadership he gave his party, Britain and the world.
"There was then much thumping of the table," the statement added.
Financial markets reacted little to the move, paying more attention to a quarter-point rate hike from the Bank of England.
"This has been the best flagged resignation ever," said Philip Shaw, an economist at Investec Securities in London.
Brown on deck
Brown, who has been Chancellor of the Exchequer for all of Blair's tenure, is due to take power after possible party rivals, including Environment Secretary David Miliband, declined to run against him.
Brown may have to face a Labour Party vote against two unheralded left-wing challengers who have yet to win the support of enough parliamentary members to force a vote.
On the domestic side, Brown, who may take over as prime minister in July, has a reputation for being to the left of Blair, though Brown himself has been an architect of "New Labour" and supported Blair's unpopular stances on Iraq, terrorism and other hot-button issues.
Brown is a relative unknown on the international stage. He is expected to be somewhat less friendly with Bush, though Brown has also shown hostility toward closer ties with Europe, and opposes joining the euro.
Recent polls have given David Cameron, the leader of the opposition Conservative Party, about a ten percentage-point lead over Brown for the next election, which has to be called by no later than 2010.
The youthful-looking Cameron has frequently been likened to Blair, as he tries to "modernize" his own party with support for environmental and other causes usually not associated with the Tories.
Steve Goldstein is MarketWatch's London bureau chief