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Blair's Progress: Sing the cosy old tunes - then get down to business

Earlier this week in a tennis club close to Brighton, three innocently changing sportsmen were astounded to come face to face with a near naked Tony Blair freshly sweating from the courts. With a nonchalant wave of his hand the - currently - most popular leader in the developed world said a diffident "Hi, guys " and stepped into the shower. Utterly stunned, the unplanned reception committee let towels and bars of soap slip to the floor as they stared like zombies at the prime ministerial apparition. At least one recovered sufficiently to utter a strangled "All right, mate". What they said when they got home, and if anyone believed them, is not recorded.

For all the trappings of power, Tony Blair isn't at all behaving like the presidential figure his Tory critics claim he wants to be. He is in high good humour, confident and focused as ever. But folie de grandeur is not among his faults. Those who have talked to him privately say that, far from letting his astonishing poll ratings go to his head, he regards them as unreal, almost depressing. He continues to warn his colleagues, first, that the conference message of "hard choices" ahead means the Government is bound to grow much less popular in the coming months. Second, he cautions that the Government's popularity only counts when it reflects a solid record of achievement. And he believes the party understands that better at the end of the week than at the beginning.

It isn't that difficult to amass evidence to the contrary. The union leaders who queued up after Gordon Brown's speech to press for big pay settlements showed every sign of failing to absorb the Chancellor's blunt message that the Government would ruthlessly put control of inflation and spending above the demands for pay increases; help for those without jobs in preference to rises for those who have them.

The national executive elections have been greeted by the left as evidence of its increased popularity within the party. The standing ovation for Barbara Castle's attack on the Government's pensions policy on Wednesday symbolises the extent to which the old-time religion of Labour still strikes a chord with the faithful. All big three of the Cabinet, Gordon Brown, John Prescott and Robin Cook, used language on occasions that shamelessly played to those old Labour susceptibilities.

Superficially then, you can make a strong argument that the party hasn't really changed. But the counter-case is stronger. First, in whatever the language they clothed it, the messages from Prescott and Brown were uncompromisingly modernising. Prescott's big speech of the week, a barnstorming demolition of the case for renationalising RailTrack, showed the Deputy Prime Minister at his formidable best in championing Blair's approach to government. The Mo Mowlams, the Harriet Harmans, the David Blunketts, the Jack Cunninghams, the Jack Straws made speeches which were throughly New Labour in form as well as content.

There will be a reshuffle, perhaps as late as next summer, perhaps earlier. When it does happen, some ministers will leave the Cabinet and perhaps the Government. But Blair is impressed by his most talented and decisive ministers. And the union leaders, who anyway show rather more understanding of the realities of government policy in private chats with ministers than, tiresomely, they do in public, are making a big mistake if they think for a second that Brown and his rising chief secretary, Alistair Darling, will regard this week's conference as other than a mandate for the toughest of approaches to public sector pay. Whatever the turbulence it causes.

There is also rather less to the NEC results than meets the eye. Skinner is a genuinely popular figure in the party, a lovable fragment of its heritage. Blair's own constituency of Sedgefield voted for Skinner. But if it thought that Skinner was coming within a mile of influencing the direction of the government Sedgefield would be utterly horrified. It also remains clear that the anti-Mandelson vote was not anti-modernisation. Blair told Mandelson some time before the ballot results that he thought it would be good for him if he lost. He certainly regarded the endless publicity his trusted lieutenant attracted over August as a real problem, believing that it would have been better for Mandelson to fight, if he was going to fight at all, simply on his record in an outstanding election campaign. He meant everything he said on Wednesday about Mandelson's talents. But he also made it clear to him that humility, dealing with people, and not becoming the story, matter too. If Mandelson learns this lesson he should have the career ahead of him implied by Blair on Wednesday.

Blair is confident, not without reason, that the party, especially but not exclusively its swelled ranks of younger members, continued to warm to him this week. This is not just because of the size of the victory but because he feels they like hearing a leader who expresses enduring Labour goals in language which speaks to those without tribal roots in Labour. There is every sign that the party still likes listening to the old music hall tunes. But there's also every sign that's what members increasingly, however affectionately, regard them as: music hall tunes.

On Tuesday, Blair struck a series of bargains not only with his party but with the wider electorate: to take two prime examples: health and education will get, in the long run, the funds they need. But the price will be real reform, of delivery standards, of administration, of structure. Bad teachers will be sacked, education authorities bypassed, precious demarcations between health service professionals painfully eradicated. There will be anguish inside Labour as well as outside it. Rivalries and tension within the Cabinet, already being exacerabated by competition for scarce resources as well as conflicts of personality, will undoubtedly increase. The going will be rough. There is turbulence ahead. Seatbelts should be fastened now. But Tony Blair at least is confident the flightpath is now clear.