For once, talk of an "historic" moment was no exaggeration when the IRA ended its 36-year-old war on Thursday. Even Mr Blair's much-derided soundbite about "feeling the hand of history" on his shoulder as he started the final push for the 1998 Good Friday Agreement, would have been appropriate.
The delight at the IRA's announcement was tempered by the knowledge that nothing in Northern Ireland is ever straightforward. It is still hard to imagine Gerry Adams and Ian Paisley sharing a cup of coffee let alone power. Mr Blair's cautious response also reflected the gloomy backdrop painted by the new and much more potent terrorist threat now facing Britain.
Although Mr Blair had been striving for an IRA statement this month before the 7 July attacks happened, senior Whitehall officials saw the timing as no coincidence. As one put it: "Events in London may have given the IRA an extra spur to show themselves as the good guys at this very difficult time."
Is the IRA's announcement a defeat or a victory for terrorism? There is already some rash talk that, having seen off the IRA, al-Qa'ida will be next. Yet the existence of a peace process in Northern Ireland inevitably required compromises on both sides. How could you reach a compromise with al-Qa'ida?
At his Downing Street press conference on Tuesday, Mr Blair made a clear distinction between the old terrorism and the new. He compared the political demands of Republicanism, shared by law-abiding people on both sides of the Irish border, and al-Qa'ida demands that no "serious person could ever negotiate on".
The Prime Minister believed the IRA would never try to kill 3,000 people - the number slaughtered on 11 September 2001. "The difference with this terrorism is that the combination of modern technology and the willingness to kill without limit makes this an appreciably different threat," he said.
He was less convincing when dodging questions about the response to the new terrorism. Exactly who authorised the shoot-to-kill policy on suicide bombers remains a mystery. The Home Office says the Government was informed about the policy in January 2002. Home Office ministers can't remember if they were told. Nor can Mr Blair.
Mr Blair described the new guidelines as a "commonsense response". But we don't know exactly what they say and they should be published as soon as possible. Some Labour MPs are uneasy but cannot ask questions while Parliament is in its long summer recess.
Similarly, there has been been precious little debate about the inevitable demise of the unarmed police force of which Britain was until recently so proud. It has been another casualty of the new war.
There are also bound to be restrictions on civil liberties under the new anti-terror law to be introduced this autumn. Mr Blair and Charles Clarke, the Home Secretary, were scarred by the controversy over control orders in the intense heat of the pre-election period. Their response to the London bombings has been more measured and they have worked hard to keep the Tories and Liberal Democrats on board.
In some respects, the next Counter-Terrorism Bill should be easier to frame than the last because we are now dealing with a known - rather than theoretical - threat. But the Government needs to resist the temptation to make a knee-jerk response that would give the police everything they keep on their wish-list of demands. The new law should be designed to last years, not until Christmas.
The all-party consensus is unlikely to survive if Mr Blair backs the proposal by senior police officers to detain terrorist suspects for up to three months without trial. There is obviously a case for holding suspects for longer than the present 14-day limit - for example, if forensic evidence is still being gathered, as it was after the bombings on 7 July.
To preserve the consensus, Mr Blair may have to concede that a judge should be required to renew detentions every 14 days, perhaps for up to a maximum of two months. Judges are not his flavour of the month and he could not resist a dig at Lord Hoffman, the law lord who said last December that the "real threat to the life of the nation" came not from terrorism but from draconian laws like the one allowing the indefinite detention of foreign nationals. A law he was striking down. "I doubt those words would be uttered now", said Mr Blair.
His wife Cherie might disagree. Shortly afterwards she made a speech in Malaysia praising the very ruling Lord Hoffman was talking about. "It is all too easy for us to respond to such terror in a way which undermines commitment to our most deeply held values and convictions and which cheapens our right to call ourselves a civilised nation," she said. Although an embarrassed Mr Blair played down the differences, he made his own priorities clear in February, when he said: "Considerations of national security have to come before civil liberties, no matter how important those civil liberties are."
Whatever new laws are agreed, they will not protect us from further atrocities. Mr Blair may have ticked a big box on Northern Ireland, but another huge one has appeared in his "unfinished business" column. The old war may be over, but the new one will last long after he has departed the scene.Reuse content