JAMES NAUGHTIE, BROADCASTER AND POLITICAL WRITER: I think that's exactly it. He is a prime minister in the twilight now, you know, the shades of night are falling. And I think what's changed in the last few days here - and it's quite a profound change - is that Mr Blair was fighting and believed he could win, to set a date that was more than 18 months, probably more than two years away, to give him time to embed his domestic agenda - which is quite controversial in his party - before handing over to Gordon Brown or, indeed, somebody else if they challenge.
But what's changed in the last few days - since an awful set of local elections and the kind of boiling up of all sorts of frustrations in his party - is that he's had to accept, I think, that this will happen next year.

GEORGE NEGUS: So what is your tip in terms of next year? When you think it will actually happen?

JAMES NAUGHTIE: I think he will want to see through his 10th anniversary in power, which falls a year this month, in May 2007. I think it will be clear then that he retires at his party conference, convention, which occurs in the autumn of next year. Now, some people want him gone before that and think they can manage it. I doubt if they will. So I think that Gordon Brown, as Chancellor, will be hope to become prime minister next year.
That, of course, opens up another question as to whether other people will try to jump into race. That's a question for the future. But I don't think Mr Blair will be there a year come Christmas.

GEORGE NEGUS: Because those who say the longer he stays, the worse it gets for Labour and, in fact, he could be putting his entire party and government in jeopardy, not just his own career.

JAMES NAUGHTIE: Well, there is some truth in that. He's very unpopular on a lot of fronts. The war is deeply unpopular and it is a war that is engraved on Tony Blair's heart, and always will be when his political legacy is written. That is extraordinarily unpopular in the Labour Party. There are many people who will not forgive him for his alliance with George Bush.
But there's a pile of other stuff coming along. There's a kind of tidal wave running towards him on education reform, on health reform, on all kinds of things where he's seen by some members of the Labour Party to be pushing too much towards a sort of market agenda. I think these people have been emboldened by the local election results, which were bad for Labour, and they believe they can deliver the final thrust. And what's happening in London, at the moment - and it is extraordinary - is that the Prime Minister and his Chancellor - Finance Minister - Gordon Brown are essentially working out a program for a transition. "You do this, I'll do that. You don't say that."

GEORGE NEGUS: A deal, James?

JAMES NAUGHTIE: It is a deal. There was a period earlier this year when two of their representatives on either side were sitting down and negotiating, secretly, a pact that would allow this decision to be made at some point in the future. There were talks but they were suspended. They're on again. Nobody knows quite what is being said but it is the arrangement by which Mr Blair will leave power. Quite extraordinary, never happened in this form before.

GEORGE NEGUS: In fact, my recollection is that they actually made a deal when Tony Blair became leader, that Gordon Brown wouldn't challenge him then and now they are doing it all over again in reverse.

JAMES NAUGHTIE: You think they made a deal and maybe Mr Brown thought there was a deal. Gordon Brown has been a minister with extraordinary powers of total command over the economy and much of the domestic social agenda for the last nine years but he's always harboured this feeling that there was going to be a moment when the baton would be passed to him and it should have come by now.
I think there's all kinds of rivalry and difficulty in that relationship. And the reason it is a difficult relationship, of course, is that when they were young members of parliament and planning for power, trying to get their party back to a respectable position from which it could win power, they were extraordinarily close. And that's the reason it is a difficult relationship - not because they hate each other but because there were once so close which makes it a very, very difficult relationship.

GEORGE NEGUS: There's a strange similarity here in Australia, of course, with John Howard and Peter Costello. But, James, what is it, what has gone wrong for Tony Blair? That somebody that we all thought, and I'm sure you guys thought, was unassailable, he was Mr Popularity, he was everything that everybody thought Britain wanted for a prime minister, and now it's gone utterly pear-shaped. Where did he get it, or how did he get it so wrong?

JAMES NAUGHTIE: Well, if I preface this by saying that Blair's resilience, as you indicate in the question, is one of the extraordinary facts of modern British politics and in modern world politics. And I would never write him off entirely. You never know what will happen. But it's the coming together of various things.
I think that if you dig deep in the Labour Party, you will find that the resentment about the war and the relationship with Bush runs extraordinarily deep. People who felt that Blair was a man with no left-leaning ideology, were always suspicious of him, had it confirmed for them by that. And then on the back of that comes a lot of market reforms in the public services, which, they say to themselves, "Ah-ha! This proves he's really a man of the right, of the centre-right."

GEORGE NEGUS: So what happened to the much exulted Third Way, James? It became Blair's way?

JAMES NAUGHTIE: I think Blair has discovered that the Third Way is a phrase and not a policy, that you can't produce the Third Way as some sort of magic solution. In the end you have to decide are there market reforms that will help the National Health Service or not? And many in his party believe that that shouldn't happen. So he's had all that.
And there is another fact which we shouldn't forget. All the fancy political talk that we could engage in about what's going on in the House of Commons - he's been Prime Minister for nine years. A lot of people are fed up. They say, "Get that man off the screen. We've heard it all before." There's a sort of ennui that sets in after that period. And when you put that together with the war and all the other things, people say, "Time to leave the stage."

GEORGE NEGUS: Let's talk about the future, James. Can Gordon Brown pull back the loss they have made to the resurgent Tories? I mean, things are looking bleak in the polls. Can Gordon Brown win for Labour?

JAMES NAUGHTIE: That's an even bigger question. Don't get carried away by the poll in the local elections. I don't think that means that much. And Cameron, the new leader of the Conservatives, is very a plausible, very popular, very attractive figure in many ways but he still got to be tested and that's a good way down the track.
I think the real question about Gordon Brown is if he does succeed to the premiership - and there are Blair people who want to stop him - will his character be right for the Labour Party at that period?
Going for a fourth election, having been in power for more than 10 years, inevitably having to answer for all things have gone wrong - and things do go wrong over a 10-year period. Brown will seem very much like just a reincarnation of everything that the Blair Government stood for. He will have his own voice but he's somebody who will look rather shop-soiled unless he finds a way - and he's been saying himself in the last few days - of reinventing the party, of renewing, of giving a new face. Can he do it? Does he have the style to do it? There is a big, big fight to come. Labour is not in an impossible position to win a fourth term but they have got to manage this transition extraordinarily carefully if they're not going to implode in the process.

GEORGE NEGUS: James, thanks for that. Nice to to talk to you. And the end of an era facing us.

JAMES NAUGHTIE: A pleasure, George.