THE PLACE TO MEET PEOPLE JOCKEYING FOR INFLUENCE IN THE LATE NINETIES

THE NEW ESTABLISHMENT Day Three: Islington On the edge of the City, once seedy and run-down, this is home for the new powerbrokers By Peter Popham

Location matters. We know where to find the old Establishment, the people and networks, the clubs, salons and dynasties that Henry Fairlie meant when he gave the term currency in the Fifties, through an article in the Spectator. They are in the clubs of St James's, the ministries of Whitehall, at home in the grand houses of Belgravia, Knightsbridge, Kensington and Chelsea. Never too far from the Queen.

Tony Blair, famously, lives in Islington. Some of his closest political friends live in the north London borough, some practically on his doorstep: Margaret Hodge MP, former head of Islington Council; her husband, Henry Hodge, a leading figure in the Law Society; Geoffrey Robertson, the prominent barrister, and Jack Straw. It was in a restaurant in Islington called Granita that Tony Blair and Gordon Brown ate their famous dinner at which the succession to John Smith was resolved. Others now, or until recently, resident in Islington include notable leftish celebrities such as Stephen Fry and Clive Anderson, academics and think-tankers such as Demos's Geoff Mulgan, the London School of Economics' Lord Desai, and more journalists than you could shake a stick at. Enriching the political mix are people such as the Social Security Secretary, Peter Lilley, and Tory MP Lady Olga Maitland.

On the face of it, such a concentration is strange. Islington is a dingy inner-London suburb, north-east of the city centre. Islington has red in its roots: Tom Paine lived here, as did George Orwell. Parts of 1984 seem to be set in Islington's Chapel Market: Winston Smith and his lover, Julia, have their trysts upstairs in a shop that may be based on the antique shops in nearby Camden Passage. But borrowed intellectual lustre alone would not induce people to come and live in a place. Why do they come?

One answer is that it is a little way up-market of Hackney, the neighbouring borough that is one of the poorest in the country. It was to Hackney that the Blairs moved in 1980, to 59 Mapledene Road E8, their first home after they got married. To this prototypically young, upwardly mobile, professional couple, Hackney meant big, comfortable houses at prices that would not buy a garden shed in Kensington. For active young Labourites it also promised a working-class constituency with a Labour-dominated council, offering abundant opportunities for advancement.

Plenty of others like them had the same idea. Queensbridge ward's Labour Party branch, which the Blairs first attended on 6 November 1980, was crammed with ambitious young people who have gone on to colonise the upper reaches of the party: the historian Ben Pimlott; Glenys Thornton, leading light of the Fabians; John Lloyd, former New Statesman editor; Andrew Puddephatt, head of Liberty (formerly the National Council for Civil Liberties) and the constitutional reform lobby group, Charter 88, and Charles Clarke, ex-head of Neil Kinnock's private office.

Hackney South was thus a cocoon for many of the big bugs in the Labour Party of today, and Islington was where you moved when your income rose sufficiently, and you began to worry about nursery education and mugging. In both districts the middle class blow-ins and the working-class natives live in close proximity. The cultural distance between the Victorian terraces and the brutalist estates gapes, which helps explain the frequency with which the Blairs have been burgled. When Blair and Brown met in Granita, it was over char-grilled peppers, sitting on hard little steel and yew chairs. A hundred yards away, opposite the town hall, it's sausage and chips in the workers' caff, a different world.

Yet as the Blairs discovered when they confronted the secondary-school problem, the cultural distance is not great enough for comfort: Islington's secondary schools are the worst in the country, to judge by the latest league tables, a fact for which the local council, controlled by the Labour group which was for a long time headed by Margaret Hodge, Blair's close political ally, cannot escape blame. Bussing the kids out to the London Oratory, in leafy Fulham, was the Blairs' desperate remedy.

A more satisfactory answer would be to leave Islington behind - to spread their wings and move out altogether, to somewhere more thoroughly salubrious. Cherie's pounds 200,000 salary would certainly make a move to, say, Tory-controlled Notting Hill, feasible. Last year there were strong rumours that such a move was imminent; Blair's closest adviser, Peter Mandelson, recently bought a house there. The ensuing embarrassment, however, would put the Clause IV and union-dumping incidents in the shade: the Blairs would have succeeded in removing themselves altogether from the mercy of Labour local authorities, and the Tories would make hay. The only politic way for them to achieve the same result is to move to Downing Street.