The unkind remarks made by the Prime Minister about Tony Blair over the weekend are the sort of tribute that the uncharismatic often make to the genuinely popular. John Major, like the American schoolgirl who sees her pretty rival easily voted Prom Queen, grumbles to the few still willing to listen about the shallowness, lack of principles and deceitfulness of his adversary. "Tsk," says Michael Heseltine. "You're so right," adds Jeremy Hanley, "t'ain't fair."

Almost everybody else knows that Mr Blair is proving to be a formidable and attractive politician. Far from being "unprincipled", he is clearly a man who harbours strong views and is prepared to fight for them. His handling of the Clause IV battle has been an example of political leadership.

The clause itself represented many of Labour's backward-looking tendencies. A piece of secular mysticism, infused with nostalgia, it acted as a justification for Labour's tendency to favour producers rather than consumers, laying emphasis on the worker, not the citizen. It is little wonder that those unions with most members in the public sector ended up supporting its retention. Their defeat is not bad news for workers, but it is excellent news for citizens - as is the manner of Mr Blair's victory.

With the largest trade unions against him, he took his campaign to the individual party member in a way unprecedented within the two leading parties. He won, and won handsomely. As result, he has energised Labour's grass-roots and identified them with his cause. Yesterday, in his emotional second address to the special conference, his most significant promise was that this type of consultation and campaigning would become the hallmark of his leadership style. For Labour, Blairism should mean goodbye to the block vote, the smoke-filled room, the caucus and the stitch-up; so long as beer and sandwiches are not replaced by bromides and market research.

But what might it mean for Britain? So far, the evidence is hard to find. The lineaments of New Labour are still emerging painfully slowly from the fogs of perpetual review and the mists of news-management. But there are tests by which we should judge Mr Blair's progress.

After a decade and a half of Conservative government, a Blair administration would have plenty to do that the Tories have left undone. Our political and judicial institutions are antique and need an overhaul. We expect priority to be given to reforming Parliament, a Bill of Rights and discussion of electoral reform.

On the economic front, Labour has work to do in reforming the monopolies legislation to create more competition, strengthening the role of regulators for the utilities and curbing abuses in the City. Labour should also be able to tackle a training crusade. In Europe, Mr Blair must seek constructive engagement and offer the country its first taste of leadership for more than a decade.

But New Labour has some difficult terrain to cross. It has to appropriate parts of the Thatcher legacy that it fought against tooth and nail - and where it was wrong. Mr Blair cannot and should not enter the next election pledged to undo the health service reforms of the past five years. Whatever their problems, the internal market and GP fundholding have improved the efficiency of the NHS. New Labour must also endorse the benefits to the consumer of privatisation, whatever its reservations about the excesses of unwise and greedy executives. In education, Labour must embrace league tables, parent power, school autonomy and radical ideas for improving teaching standards.

Every step of the way, Mr Blair will hear siren calls wafted on the wind. These will remind him how difficult it will be to satisfy the party. They will contrast him unfavourably with his predecessor, who rarely confronted colleagues. Appeal will be made to the traditions of the party. Distressed nurses, teachers and train-drivers will write to newspapers asking what has happened to Labour and why is it treating them like this? If he is the leader that we believe him to be, Mr Blair will listen politely - and then get on with what he knows he has to do.