I am not for turning, says Blair

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TONY BLAIR today rejects calls for a change of direction in response to the crisis that has engulfed the Government, and insists he will press on with his radical and controversial plans to modernise Britain.

In his first detailed statement since Labour's "Black Christmas", the Prime Minister writes in The Independent: "We will carry on putting forward a sustained programme of modernisation... we will carry on offering Britain the new politics on which we were elected."

Mr Blair's declaration will disappoint Labour MPs hoping for a change of course after the resignation of Peter Mandelson, a key architect of New Labour, and an interview in The Independent with the Deputy Prime Minister, John Prescott, in which he said he wanted to reassert traditional Labour values and use public spending "to uphold the economy in the traditional Keynesian way".

Meanwhile, in what will help Mr Blair in his attempts to try to draw a line under the affair, it became clear last night that the former secretary of state for trade and industry now looks unlikely to face any action by the Britannia Building Society over not disclosing his pounds 373,000 loan from Geoffrey Robinson when applying for a mortgage for his pounds 475,000 house in Notting Hill, west London.

Following a detailed letter from Mr Mandelson, the building society is understood to have decided not to take any further action, which could have involved referring the matter to the police.

Although Mr Blair and his deputy deny any rift, the Prime Minister takes a different economic line in today's article, saying: "We will found growth on fiscal and financial prudence." He also rejects "the old left's belief in a trade-off between growth and inflation".

Mr Blair says: "We will continue to be for the future, not for the past... We will continue to govern as New Labour."

Insisting he will get the Government back on track after two weeks of turmoil, Mr Blair adds: "Nobody ever went into government thinking it would be a nice, easy, nine-to-five job. It takes resolve, determination, real grip, and a sense of purpose and direction."

He makes clear, however, that the "strong leadership" which is his trademark "is not an end in itself, it is for the purpose of making every family better off, and giving every child a chance".

Pledging to put the Government's troubles behind it, he says: "We will continue to concentrate not on the politics of scandal and gossip, but on the politics of the fundamentals and of the big picture."

However, Mr Blair appears to acknowledge that the public's honeymoon with the Government is ending as the economy worsens. "I know that in Britain, many people are facing the future with apprehension, unsure of what it will bring," he says.

Admitting his reforms will run into controversy, he says: "There are bound to be setbacks. We will face them, determinedly. There are bound to be attacks. We will respond to them, robustly."

Today, the Prime Minister, who is on a three-day visit to South Africa, will continue his campaign to steady the Government's ship in a keynote speech, saying his goal is the transformation of the country and its institutions.

Mr Blair will admit that he will be accused of being "authoritarian and harsh" as the Government's reforms are unveiled in the coming months. But he will insist the changes to welfare, education, law and order and the NHS are "controversial but right".

But further signs of tension in the Cabinet over the Government's direction will surface today when the Secretary of State for Education and Employment, David Blunkett - normally a "soft left" ally of Mr Prescott - rejects calls for a change of strategy.

Speaking to local authority leaders in Sunderland, Mr Blunkett will say: "Modernisation is the only way to achieve traditional aspirations such as greater equality, better health and education and reduced crime. Modernisation is central to this Government's approaches. It has been since May 1997 and will continue to be in 1999 and beyond."

Labour's support has dropped by 7 per cent following the Mandelson loan scandal, according to an opinion poll published in The Express today.