The Labour leader swiftly showed that the defeat - by a majority of only 50.9 per cent to 49.1 - would not slow the momentum towards a new statement of the party's aims and values to replace the 76-year-old commitment to 'common ownership of the means of production distribution and exchange'.
The conferene decision - which would have gone the other way by a large majority if any one of several big unions had not decided to support the resolution before Mr Blair's speech on Tuesday - will certainly not prevent Mr Blair securing large majority backing for a new and modernised Clause IV at next year's conference. But in the shorter term it is an embarrassment to the leadership and emphasises that Mr Blair will not make his momentous change without a fight. It was swiftly seized upon by a Tory high command desperate for ammunition with which to attack Labour at the Conservative conference next week.
The vote came after the conference had backed a multilateralist defence statement from the party leadership while at the same time approving, albeit by a far narrower majority than last year, a resolution in favour of scrapping the Trident nuclear programme.
Jeremy Hanley, the Tory chairman, claimed that the Clause IV decision showed that the party did not want to change and was unfit to govern. He insisted: 'It is still the old Labour Party, the party of unilateral nuclear disarmament, the party of state ownership, the party that refuses to redefine socialism as Mr Blair pretends he can.'
Mr Blair, who already has a clear idea of the statement underlining social justice, economic efficiency and some elements of public ownership which he will put to the National Executive in December, told BBC radio the slender majority showed 'how far the party has travelled in the last 48 hours'.
He emphasised his determination to push through the change, and said it would be 'the symbol of change and of the fact that we have the courage to change ourselves'. That in turn would be the symbol to 'convince the British people that they should change and turn out a discredited Tory government'.
The vote came after the most highly charged conference debate of the week was opened by Jim Mearns, the delegate from Glasgow Maryhill, who had resisted pressure from Mr Blair's office and senior Labour front bench figures not to press the resolution.
Mr Mearns declared that 15 years of Tory rule had convinced him that 'unfettered capitalism is evil'. He added: 'Comrades, don't just let's sing about it. Let's do it. Let's raise the scarlet standard and keep the red flag flying here.' But Alan Johnson, general secretary of the Union of Communication Workers, told delegates: 'We want to fight the election on policies, not shibboleths.'
A switch by four or five more constituency delegates would have ensured a victory for the leadership, and there was some irritation among the Blair circle that Mr Johnson and Denis MacShane, the Rotherham MP, were the only prominent pro-platform speakers called by Robin Cook, the shadow Trade and Industry Secretary, who chaired the debate.
It was said later on Mr Cook's behalf that he was not aware any other front bench speakers wanted to be called.
The leadership were partly prisoners of the secrecy of Mr Blair's decision to announce the replacement of Clause IV on Tuesday, making it impossible for the arrangements committee to get the resolution out of the way before he spoke.
As part of his determination to protect middle-income groups on taxation, Mr Blair hinted at cuts by emphasising that tax levels under Labour would depend on the health of the economy. 'Of course if the economy is very strong and you're able to grow then you can reduce the burden of taxation.'
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