The Week in Politics: And for his next trick, Tony Blair will catch a bullet in his teeth

The great Houdini has done it again. Tony Blair has not only escaped, but ended the political season on a high. He can depart for the summer break in remarkably good shape and looking down on the rest of Westminster village from a position of almost complete dominance.

The great Houdini has done it again. Tony Blair has not only escaped, but ended the political season on a high. He can depart for the summer break in remarkably good shape and looking down on the rest of Westminster village from a position of almost complete dominance.

A couple of weeks ago, plenty of MPs and commentators were still putting money on him standing down as Prime Minister this month. Only a week ago, a rumour swirled round the parliamentary press gallery that he would resign last weekend. At first I scoffed, but when I thought about it, I began to think it might just be true.

Only a week on, Mr Blair is in a commanding position. He swatted Michael Howard in the Commons debate on the Butler report. He sailed through his monthly press conference, even hinting that he would be around for another five years. To remind us who is the boss, he dismissed the advice of those ministers who told him not to risk sending Peter Mandelson to Brussels.

Having come through his mini-wobble about whether to quit, Mr Blair has recovered ground at breakneck speed. The small amount of contrition he showed when the Butler inquiry was published did not last. In the past week, I thought he was in danger of showing hubris.

While those of us in the village could only admire the Prime Minister's recovery, I wondered what people in the real world would make of it. For me, the best speech of the week was made by Charles Kennedy in the Commons debate on Iraq. Mr Blair would do well to read it during his holiday. It might help him to avoid the fate of Margaret Thatcher, who staged a similar recovery after seven years in office, won a third election victory but was then driven out by her own party.

The Liberal Democrat leader said: "The Prime Minister should listen and understand - I still honestly believe that he does not quite get it - what people in this country think about the matter. He must demonstrate a genuine contrition for the misjudgments that have undoubtedly taken place."

At his press conference, Mr Blair dodged the unanswered questions arising from the Butler inquiry into the pre-war intelligence as though they didn't matter. For many people, they do.

But Downing Street is increasingly confident the country is finally ready to "move on" from Iraq. No wonder. Blair aides have detected a trend; when domestic issues dominate the political agenda, Labour's ratings go up a couple of points in the opinion polls.

How did Mr Blair turn it round? Partly because he had a real strategy for the past month and was not relying on day-to-day tactics. His recovery plan was built around the five-year blueprints for health, education, crime and transport. They set the agenda, suggesting for the first time that Labour might achieve its Holy Grail of renewing itself while in office.

The other reason Mr Blair came out on top was a feeble performance by the Opposition. Blair aides could hardly believe their luck when Michael Howard told The Sunday Times that he would not have voted f or the Commons motion authorising the war if he knew then what he knows now - but still supported it. He was, of course, trying to have his cake and eat it. But it made him look foolish and gave Mr Blair some valuable ammunition for the big debate.

The gloom among Tory MPs as they left Westminster for the summer was palpable. Many no longer think Mr Howard is the great saviour and are questioning his judgement. In the past month, the Tories have been outmanoeuvred by the Government. Some at No10 call it "man-for-man marking": Labour denies the Opposition any space in a crowded midfield. When the Tories propose choice in public services, Labour offers choice too. When the Tories bang on about government waste, Gordon Brown axes 100,000 civil service posts. As the Tories prepare to switch their focus to crime, the Government produces a five-year plan. Moreover, Labour can actually implement its plans, while the Tories immediately lack credibility because no one expects them to win next year.

Mr Blair can discount the possible loss of Mr Mandelson's Hartlepool seat because he knows the Liberal Democrats, not the Tories, are most likely to win the by-election if Labour loses. When the official Opposition regards a by-election in a seat in which came second last time as a threat rather than an opportunity, then it really is in trouble.

The Prime Minister has his critics in the Labour Party, trade unions and media. But the reason he looks so strong is that the critics lack the focus that only an effective Opposition can bring. Imagine if the Tories had won the Leicester South and Birmingham Hodge Hill by-elections and were odds-on to win Hartlepool. A strong opposition has been missing since 1997, and this week we found that it is still missing. It lets Mr Blair off the hook.

When the Iraqi prisoners scandal was haunting him in April, it looked as though Mr Blair's long run of good luck was coming to an end. But it hasn't happened yet. "The harder we work, the luckier we get," was the maxim bandied around as Mr Blair and his staff enjoyed Indian food in the garden of No 10 at their end-of-term party on Wednesday.

At the close of a turbulent political season, there is no doubting who is the dominant figure in British politics. For all his faults, he may well dominate it for some time yet.