Steve Richards: The clamour over sleaze is the clearest sign yet that Blair's time is running out

There comes a time when an unflattering perception overwhelms everything else
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Politics is viewed increasingly through two prisms. One is marked "Blair must go, for the sake of the Labour Party and the country". The other is marked "Blair must stay, for the sake of the party and the country". Not since the final days of Margaret Thatcher have the same events and personalities been seen from such intense and conflicting perspectives.

Not surprisingly, Tony Blair and his entourage view the situation through the latter prism. He and they are more convinced than ever of the Prime Minister's indispensability. As far as they are concerned, bad personal poll ratings are a form of vindication, a sign that tough decisions are being taken. Once popularity was almost an end in itself. Now unpopularity is seen as a triumph of sorts.

The frenzy over party funding obscured an extraordinary speech by Tony Blair delivered in Sedgefield last Thursday, the day after his Schools Bill won a majority with Conservative support. The speech was planned as part of a new Downing Street offensive, the next stage of the unrelenting crusade. As it happened, the crusade faced the unexpected obstacle of a fuming party treasurer complaining about loans that he had known nothing about.

Even so, the speech was much more significant than the row over party funding. In it, Mr Blair signalled a new Clause IV-type campaign in which he would seek to persuade the Labour Party that his "reforms" were necessary. Once more he erected a false juxtaposition, suggesting that the only dividing lines were between his reforms and the Conservatives' plans that would benefit the wealthy. This took some chutzpah on the day after the Conservatives had kept his show on the road by supporting the Schools Bill.

The speech was the latest product from those convinced of the need for the Prime Minister to stay on for at least 18 months. They hold this view with a determined intensity that should not be underestimated. This is a group that regards the education reforms as the equivalent of Labour's attempts to reform the trade unions in the late 1960s. Labour failed then. It must succeed now, or it is doomed. More widely, the party must be seen to be on the side of "reform", or their interpretation of reform. Patronisingly - and ignoring his record for more than a decade - they are suspicious of Gordon Brown's willingness to reform. As a result, they seek to shape other looming decisions. Before Mr Blair goes, they want to ensure that his successor is trapped on to their agenda for years to come. Mr Blair must stay to save the party and the country.

There are obvious and well-rehearsed flaws in this view of politics, but they are partly irrelevant. What makes this prism increasingly unfocused is the opposite one. While the Blairite revolutionaries prepare for the next stage of their crusade, they face a significant number of people and media organisations that are convinced he should go. We should not overestimate the significance of the newspapers. They are capable of making editorial judgements almost randomly. Even so, the sense of turbulence is conveyed when The Economist and The Guardian declare for different reasons that Mr Blair should resign this year.

The latest frenzy over party funding is viewed largely through this prism. Before long the story heads for concluding lines about the terminal nature of Blair's leadership. In this case, the focus on Blair is unfair. He had an election to fight and Labour needed additional cash to challenge a reinvigorated Conservative Party attracting loans as if they were going out of fashion. He would have been slaughtered if Labour had fought an amateurish campaign because it did not have enough money. Mr Blair was not preparing for a meaningless BBC seminar, but a campaign for power against a party suddenly awash with cash. More broadly, Mr Blair had made party donations transparent. Even more broadly, we need well-funded parties, and not cash-strapped ones. Once more in the pious anti-Blair hysteria democracy itself is under threat. They're all corrupt! Who needs parties?

But the prism "Blair must go" is in place. None of the alternative arguments is heard, and therefore they do not matter very much. It is Mr Blair's flaws that are noticed alone.

The flaws are part of a tragic irony. On the day he was elected Prime Minister in 1997, Mr Blair declared defensively that "We were elected as New Labour and will govern as New Labour." From the beginning, he sought to reassure. He would be new. He would not be old Labour. Old Labour was seen as anti-American. New Labour would be so pro-American it would support a dangerous and ill-thought-through war. Old Labour was seen as anti-business. New Labour would be pro-business to the point where big gifts or loans were regarded with pride.

Old Labour destroyed itself partly because bodies such as the National Executive Committee wielded too much power. New Labour would undermine such bodies to the point where its own treasurer did not know what was going on. Mr Blair's antennae would be alert to any liaisons with the trade unions, but the past offered no guidance in relation to business leaders. Like a character in a film noir, Blair sought to avoid the traps of the past and fell into some equally nightmarish ones of his own making.

There comes a point when an unflattering perception of a leader overwhelms all other consideration. If you have a spare moment - a very spare moment - take a look at the photos of William Hague in a baseball cap, shortly after becoming Conservative leader in 1997. He does not look too bad in the cap. Admittedly he would not get a contract as a male model, but he looks cool enough. At the time, the photos were viewed through the prism "This leader is a buffoon". Therefore in the photo we saw only a buffoon. Listen carefully to Michael Howard talking with a genuinely good-humoured charm. He did so when he was a leader too. It did not matter. He was viewed through a prism marked "Something of the night about him". If Mr Howard had single-handedly brought peace to the Middle East it would have been regarded as a sinister act.

The prism marked "Blair must go" is also partly a distortion. No one can accuse him of hiding his appetite for public service reforms, or to be more precise his version of reform. He is less culpable in terms of party funding than Conservative leaders. Yet this is not heard. The din is too loud. It started with Iraq, when Mr Blair's authority was diminished deservedly. Now he is a leader at odds with much of his party, determined to stay in place when most of the media has lost patience. Those who view events through the prism marked "Blair must stay" underestimate the degree to which his time is running out.