Tony Blair has apologised for his mistakes and admitted that his legacy in the eyes of many people will be dominated by Iraq when he stands down as Prime Minister on 27 June.
In an emotional and highly personal speech, Mr Blair insisted that he had done what he believed was "right for my country" and stopped short of saying sorry for the Iraq war.
But he struck his most conciliatory tone over Iraq, admitting the fierce "blowback" of global terrorism and conceding he would leave office with many Britons believing the Iraq invasion was wrong.
Loyal Blairites launched a campaign to pin the blame for the mistakes made after the conflict on the Bush administration, which rejected Britain's advice by abolishing the Iraqi army after Saddam Hussein was toppled. Alastair Campbell, the former Downing Street communications director, and Baroness Morgan of Huyton, the former director of government relations, both criticised Donald Rumsfeld, the former US defence secretary, for the post-war decisions.
Lady Morgan admitted: "The fundamental problem is it [Iraq] has become a place where terrorists from every group are now operating." She added: "The operation of the war and post-war planning was Donald Rumsfeld and I don't think President George Bush was running Donald Rumsfeld in the end. Operationally, I think [Mr Blair] was frustrated that things didn't always happen in the way that he'd hoped or expected would take place."
Mr Blair, speaking in his Sedgefield constituency, pleaded with the British people to believe that he acted in good faith, even if they disagreed with him on Iraq, but admitted they would be the judge.
"Hand on heart, I did what I thought was right," he said. "I may have been wrong. That's your call. But believe one thing if nothing else. I did what I thought was right for our country."
He defended his "shoulder-to-shoulder" approach with the United States over Iraq and Afghanistan, but admitted: "The blowback since, from global terrorism and those elements that support it, has been fierce and unrelenting and costly. For many, it simply isn't and can't be worth it. For me, I think we must see it through. They, the terrorists, who threaten us here and round the world, will never give up if we give up. It is a test of will and of belief. And we can't fail it."
Mr Blair, who drafted his speech as he flew to his constituency in Co Durham, conceded the "great expectations" when he came to power in 1997 had not been fulfilled in every part. Although some aides admitted he originally wanted to carry on until next year, he said: "I have been Prime Minister of this country for just over 10 years. In this job, in the world today, that is long enough for me, but more especially for the country."
John Prescott confirmed he would stand down as deputy Labour leader, and is expected to leave the Commons at the next general election. Nominations for the posts of Labour leader and deputy leader open on Monday and close on Thursday.
The results will be known on 24 June and Mr Blair will leave Downing Street on 27 June, when Gordon Brown will almost certainly become Prime Minister. Mr Brown may win the leadership unopposed in a "coronation" as left-wing MPs have not yet mustered the necessary nominations by 45 Labour MPs.
Mr Brown led the tributes when Mr Blair informed the Cabinet of his departure timetable in a low-key fashion at its weekly meeting yesterday. The Chancellor praised Mr Blair's achievements as "unique, unprecedented and enduring".
He will launch his leadership campaign today, insisting he would welcome a contest and heralding a mixture of continuity and change. In a sign that he may distance himself from Mr Blair's decisions on Iraq, Mr Brown said in a television interview yesterday: "At all times he tried to do the right thing."
President Bush said he would miss Mr Blair, as Prime Minister, and was ready to work with Mr Brown, confident that he "understands the consequences of failure" in Iraq. He hailed Mr Blair as a "political figure who is capable of thinking over the horizon", adding: "I have found him to be a man who's kept his word, which sometimes is rare in the political circles I run in."
Cabinet ministers said the Prime Minister had acknowledged at their meeting that Labour needed to move on but urged them to "entrench" his reforms. Some expressed doubts about whether Mr Brown would continue them but allies of the Chancellor said he would bring in "different reforms".
The Labour MP Frank Field said he was "saddened" by Mr Blair's resignation. He told GMTV's Sunday programme: "We're divorcing the person who's been most successful in winning us elections and doing it in almost a clinical fashion." He added: "My guess is as we never, ever, ever produced anybody like him to win elections, in 18 months time we may be looking back to this week and thinking, 'Wow! How extraordinary that we shoe-horned him out in this fashion!'"
A CommunicateResearch survey for tonight's BBC Newsnight programme found that Mr Brown was seen as less "in touch with ordinary people" than Mr Blair, David Cameron or Sir Menzies Campbell. But Mr Cameron was seen as more concerned with spin and public relations than Mr Brown.
Mr Cameron said the Prime Minister left a legacy of "dashed hopes". He said: "Obviously some good things have happened in the last 10 years, not least the conclusion of the peace process in Northern Ireland just a few days ago. But when the Prime Minister spoke about some hopes that have been disappointed, I think that was putting it mildly. I think many people will look back on the last 10 years of dashed hopes and big disappointments, of so much promised and so little delivered."
Sir Menzies, the Liberal Democrat leader, tabled a Commons motion calling for an immediate general election so the people could choose the next Prime Minister. He said Mr Blair had presided over "a decade of missed opportunities in which the hopes of the British people for a new kind of politics were shattered".
Ken Livingstone, the Mayor of London, said: "I think that in the same way that perhaps one of the biggest long-term successes is bringing peace to Ireland, the most catastrophic error is the war in Iraq. It has, in a sense, created a whole new generation of terrorists."
The resignation speech
This is an edited extract of Mr Blair's speech:
I have come back here, to Sedgefield, to my constituency, where my political journey began and where it is fitting it should end. Today, I announce my decision to stand down from the leadership of the Labour Party. The party will now select a new leader. On 27 June, I will tender my resignation from the office of Prime Minister to the Queen.
I have been Prime Minister of this country for just over 10 years. In this job, in the world today, that is long enough for me but more especially for the country. Sometimes the only way you conquer the pull of power is to set it down.
1997 was a moment for a new beginning, for sweeping away all the detritus of the past. Expectations were so high, too high, too high in a way for either of us.
Now in 2007, you can easily point to the challenges, the things that are wrong, the grievances that fester. But go back to 1997 ... Think about your own living standards then and now ... There is only one Government since 1945 that can say all of the following: more jobs, fewer unemployed, better health and education results, lower crime, and economic growth in every quarter - this one.
Decision-making is hard. Everyone always says 'Listen to the people'. The trouble is they don't always agree ... And, in time, you realise putting the country first doesn't mean doing the right thing according to conventional wisdom or the prevailing consensus - it means doing what you genuinely believe to be right. Your duty is to act according to your conviction.
All of that can get contorted so that people think you act according to some messianic zeal. Doubt, hesitation, reflection, consideration and reconsideration - these are all the good companions of proper decision-making. But the ultimate obligation is to decide.
I decided we should stand shoulder to shoulder with our oldest ally. I did so out of belief. So Afghanistan and then Iraq, the latter, bitterly controversial. Removing Saddam and his sons from power, as with removing the Taliban, was over with relative ease. But the blowback since, from global terrorism and those elements that support it, has been fierce and unrelenting and costly. For many, it simply isn't and can't be worth it.
For me, I think we must see it through. They, the terrorists, who threaten us here and round the world, will never give up if we give up. It is a test of will and of belief, and we can't fail it.
Great expectations not fulfilled in every part, for sure. Occasionally, people say, as I said earlier, 'They were too high, you should have lowered them.' But, to be frank, I would not have wanted it any other way. I was, and remain, as a person and as a prime minister, an optimist. Politics may be the art of the possible but, at least in life, give the impossible a go.
So, of course, the vision is painted in the colours of the rainbow, and the reality is sketched in the duller tones of black, white and grey.
But I ask you to accept one thing - hand on heart, I did what I thought was right. I may have been wrong. That's your call. But believe one thing if nothing else - I did what I thought was right for our country."
This country is a blessed nation. The British are special, the world knows it, in our innermost thoughts, we know it. This is the greatest nation on earth. It has been an honour to serve it. I give my thanks to you, the British people, for the times I have succeeded, and my apologies to you for the times I have fallen short.
*From The Independent.