Murdoch praises Howard and hints Blair may lose support of 'The Sun'

Tony Blair faced the highly damaging prospect of losing the support of The Sun newspaper last night after Rupert Murdoch said he was "torn" between backing Labour and the Tories at the next election.

In an interview with BBC 2's Newsnight, Mr Murdoch praised Michael Howard, the new Tory leader, and suggested that the Shadow front bench looked like a government-in-waiting.

Although the media tycoon insisted that he was still impressed by Mr Blair's handling of Iraq, he was worried about the EU constitution and the Prime Minister's opposition to a referendum on it.

Downing Street will be alarmed that the chairman of News Corporation was considering withdrawing his papers' support for the first time in nearly a decade.

Alastair Campbell, Mr Blair's former director of communications, felt his finest achievement in opposition was persuading The Sun to back him in the 1997 general election campaign.

In an interview broadcast last night, Mr Murdoch, who is also chairman of the satellite television group BSkyB, spoke for the first time about the possibility of backing Mr Howard.

"I would say we will have to see how the Tory front bench looks, if it looks like a viable alternative government, which it hasn't so far," he said.

"We will not quickly forget the courage of Tony Blair in the international sphere in the last several months, so we may be torn in our decision, but let's wait and see."

"It's a long way away, let's see what the Government is doing with Europe, let's see how Mr Howard performs, how the Government performs."

Mr Murdoch warns of the "great dangers" if the UK signs up to the proposed European Union constitution and echoes his newspapers' support for a referendum.

"I don't like the idea of any more abdication of our sovereignty in economic affairs or anything else," he said.

"We'll have to see what's in the final constitution. If it's anything like the draft, then certainly we'll oppose it."

Asked if Mr Blair still had his support he added: "Let's just say we have a friendly relationship as I do with Mr Howard, and the jury's out."

A Labour party spokesman reacted quickly to Mr Murdoch's remarks. "With potentially two years to go before a general election and a new opposition party leader, it is not surprising that News International are taking stock of the political situation," he said.

"We welcome Mr Murdoch's comments in praise of the Prime Minister's international leadership and are confident that when the next election comes the delivery of improved public services will mean that we deserve the support of News International readers."