Despite opposition from Britain's two biggest unions, a special conference at Central Hall, Westminster, voted by just under two-to-one to back his reforms. At the same venue more than 75 years ago the party adopted the clause, aspiring "to secure for the workers by hand or by brain the full fruits of their industry". The new clause, while calling for "power, wealth and opportunity to be in the hands of the many not the few", also lauds the "enterprise of the market" and the "rigour of competition".
Mr Blair succeeded where Hugh Gaitskell failed and Neil Kinnock never dared to try. Opening the conference, he declared himself a "leader in step with his party, and a party in step with the British people". He promised that "change and modernisation" will continue, adding: "It goes on; in the development of the party; in the development of policy."
But the struggle to retain the words that appear on every Labour Party membership card continued to the end. Arthur Scargill, president of the National Union of Mineworkers, was slow hand-clapped when he tried unsuccessfully to argue that the special conference had no power to replace Clause IV.
Bill Morris, general secretary of the Transport and General Workers' Union, said he would accept change, but that the union "will not accept change at any price". And Rodney Bickerstaffe, associate general secretary of Unison, said: "I believe that John Smith would have led this party to victory at the next general election. I happen to believe he would have done so without changing Clause IV."
The final margin was 65.23 per cent for , 35.77 per cent against. Constituency parties voted overwhelmingly for the new clause, but other affiliated organisations - chiefly the unions - held the majority of votes and they voted only narrowly for change, with 38.23 per cent in favour and 31.77 per cent against.
Mr Blair's majority had slotted into place before delegates had even taken their seats, when the white collar union MSF's delegation voted 21 to 14 to back the Labour leader's reforms.
After the vote Mr Morris, whose union voted against change, sought to associate himself with the outcome, saying it was "a good result". Mr Bickerstaffe said: "I don't see we can do anything other than accept the change."
In his speech Mr Blair trod on traditional Tory territory with a plea for "one nation". He said: "This country needs new energy, vision and ideas. A government free of dogma, not hidebound by ideology but driven by ideas. A country that is proud to call itself one nation. One nation, where by the strength of our common endeavour we achieve more than we achieve alone."
After the result Mr Blair confessed: "If sometimes I seem a little over- hasty and over-urgent, it's for one reason and one reason only - I can't stand these people, these Tories, being in government over our country."
The Prime Minister last night launched a ferocious two-pronged attack on the Labour leadership. Writing in today's News of the World he denounced the Clause IV debate as the "biggest attempt to con the gullible since the wolf dressed up as Little Red Riding Hood's grandmother".
In the Sunday Times, Mr Major branded Tony Blair as a "soundbite politician" whose party was pre-packaged like a "soap powder". Further report, page 2 Alan Watkins, page 25Reuse content