Leading article: Monarchy: Blair must tackle the final taboo

MODERNISATION is the Blair government's great watchword, and looking around the tattered institutional landscape of Britain on the eve of the Millennium, it's not before time. Yet Mr Blair's renovation turns out to be a patchwork: radical here, timidly conservative there. Forward march in Scotland, glacial progress on the antiquated procedures of the House of Commons. This ambivalence is most obvious in Labour thinking about the monarchy. Huntin' and shootin', the acme - still - of undeserved deference and anachronistic class privilege, the monarchy limps into the new century. But, since Diana's death, Labour has declared an exclusion zone around the subject. Tony and Peter may chat to Charles and HM, but let no one else dare utter a threatening word.

Today however Canon Eric James breaks from deep Establishment cover to demand, in an article in The Independent, that the Government confront the contradictions now washing around Buck House. The advent of a republic in Australia, the abandonment of the hereditary principle in selection for a second chamber, the growing weight of the anomaly presented by the monarch's headship of the Church of England: to Canon James's list we would add the funny money of the British constitutional set-up - "prerogative powers" by which the existence of the monarchy covers up a multitude of power plays, including of course the ultimate power of selecting the Prime Minister in the event of a House of Commons logjam.

Tony Blair may think he has a strategy. But it seems to consist of grooving with the Heir to the Throne to the strains of Cool Britannia and hoping that his clandestine trysts with his mistress do not get into the public prints. This will not do. There is, true, a deep well of public affection for the persons of the Queen and her mother. But a clear-eyed reformer will separate personality and institution. A truly modernising government would move forward on two fronts. First, the formal powers, patronage, honours and prerogative - isn't the incorporation of the European Convention on Human Rights a fitting moment to review the multiple anomalies associated with "the Crown"? Then, the palaces and the flummery and the retainers and the grace-and-favour apartments. They need to be slimmed and disbanded - the ultimate privatisation. What would be left would be more than enough for a modern polity. Just what is wrong with these particular Scandinavian- style attributes?