The Labour leader's unexpectedly wide margin of victory, scored over his traditionalist opponents at the Scottish party conference on Friday, has prompted a hard rethink on aims and objectives. The wording of the clause will be finalised at a summit today between Mr Blair and the party's deputy leader, John Prescott.
Labour will pledge itself to a "dynamic" private sector rather than the 77 year old catch-all common ownership of the means of production, distribution and exchange, though there will be a continuing commitment to public ownership. Mr Blair envisages a mixed economy, blending a thriving private sector and successful public services.
He has decided he can now comfortably ignore trade union demands that Labour promise jobs for all. The words "full employment" will not appear in the new version of the party's constitution, although the importance of the concept is likely to be acknowledged.
Instead, there will be a Clause IV concentrating on social justice, equality and the fight against poverty, plus a more general declaration backing employment for all in a society where the talents of every person can flourish.
Yesterday, Mr Blair told a north-west Labour conference in Southport that "not only the vote was won, but the argument was won too". He added: "These are the values of the majority of people in this country, and we should enshrine them in our constitution: solidarity, social justice, equality, the insight that together we can achieve what we cannot do alone.
"We will be a party concerned less with theories of economic ownership than with the values that motivate our politics, and fuel our determination to fight poverty and injustice. To create a Britain where individuals flourish within a strong community where mutual rights and responsibilities are recognised; where power, wealth and opportunity are in the hands of the many and not the few; where poverty and prejudice are overcome; and where we act together to realise the full potential of all."
The final version of the new statement of aims and objectives will be completed today and will go to the party's National Executive Committee tomorrow for approval before being put to a "one member one vote" ballot of Labour's 320,000 members.
Delegates to the Scottish Party Conference yesterday overwhelmingly supported a resolution on economic policy that demands the next Labour government should introduce a programme of investment and renewal in manufacturing and the public sector "underpinned with the objective of achieving full employment".
Mr Jim Stevens, speaking for the Scottish party executive, said that restoring full employment was "a long march" that the people of Scotland should engage in with the Labour Party. The delegates also backed a resolution calling for privatised public utilities to be taken back into public ownership.
But a senior Labour source said: "The Scottish party is perfectly entitled to express its opinion, but those opinions are not national policy and it will be up to the national party conference and the National Executive.
"We don't have any plans to re-nationalise electricity, water or British Telecom because we don't think the benefits of re-nationalisation are justified by the large sums involved."
The resolution, put forward by the Transport and General Workers Union, was backed by Labour's Scottish executive, which on Thursday crucially swung its weight behind Mr Blair's drive for reform. The general union GMB, Labour's second largest affiliate, abstained in the vote on Clause IV, which went 58-41 in the leader's favour.
Full employment has been a consistent plank of Labour policy in post- war years. John Smith reiterated his support for it in his 1993 speech to the Trades Union Congress.
In the wake of the Scottish vote, Labour insiders calculate that Mr Blair is assured of a virtual walk-over at the special conference to approve the new statement of aims in London on 29 April.
lMr Blair was the target of a crude letter bomb sent to his constituency home in County Durham, police said last night. Scottish nationalist extremists claimed responsibility.
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