Leading article: Tony Blair's legacy is being determined far from home

British politics can often come across as infuriatingly parochial in its obsessions. Westminster has been preoccupied of late with gossip about John Prescott's indiscretions, local elections and, inevitably, the question of when Tony Blair will leave Downing Street. But at the weekend we were given a timely reminder of an issue that will ultimately be of far greater significance to British politics: Iraq. Mr Blair is convinced that he can still determine his political legacy through reform at home. Yet the truth is that his place in history is now being determined far away in the sands of the Middle East. And the situation there is fast slipping beyond any form of control.

On Saturday a British helicopter crashed in the southern city of Basra. The Ministry of Defence is yet to confirm whether it was brought down by enemy fire, but, in any case, the significance lay in the response of the local population. A crowd gathered round the crash site to celebrate and stone the bodies of the five British servicemen who had died. Then an ugly scene turned uglier. As British troops arrived, they were attacked with petrol bombs and mortar rounds. Five local people, including two children, were killed in the ensuing firefight.

The significance of this development should not be underestimated. After the fall of Saddam Hussein, British methods in the south were heralded as a refreshing contrast to the heavy-handed approach of American troops in the rest of Iraq. British troops patrolled the streets of Basra in berets, rather than helmets. Extensive experience of urban peacekeeping came into play.

But any feelings of goodwill towards our soldiers in Iraq have long since disappeared. Today, three years after the invasion, our troops are largely confined to barracks. Joint operations with the Iraqi army came to an end after British troops broke into an Iraqi police station in Basra last September. Relations between our troops and the local population were stretched to breaking point by a video of a vicious assault on stone-throwing Iraqi youths that came to light earlier this year. This latest bloody incident is likely to destroy trust completely. The "battle for hearts and minds" has been lost.

On the first day of his new job, the Defence Secretary Des Browne found himself dealing with the bereavement of five British families. Mr Browne is parachuted into a job that would test even the most experienced and capable of politicians. As if that is not enough, he will also have to grapple with one of the most critical questions in British politics: When will our troops leave Iraq? Let us hope Mr Browne is prepared for this ordeal.

In a similar baptism of fire, our new Foreign Secretary, Margaret Beckett, today travels to the United Nations to take part in a Security Council meeting on Iran's nuclear ambitions. The negotiations are at a particularly sensitive stage. Russia and China are threatening to veto a draft resolution to put pressure on Iran. As the Russian ambassador to London points out today, the diplomatic dance over Iran is looking worryingly similar to the build-up to the invasion of Iraq. Ms Beckett's predecessor, Jack Straw, was demoted partly for failing to be sufficiently robust on Iran. We will soon find out whether Ms Beckett has been ordered by the Prime Minister to take a harder line.

The international outlook grows steadily bleaker. As Iran inches closer to acquiring a nuclear weapons capability and Iraq descends further into the abyss, the risks of failure grow greater. The important question now is whether Mr Blair and this present Government have either the moral authority or the competence to steer Britain through the treacherous diplomatic and military waters that lie ahead. The signs are anything but comforting.