Blair fights for survival as perilous week begins

Britain's Tony Blair pulled out all the stops yesterday to avert a damaging parliamentary defeat over education reform at the start of the most perilous week of his premiership.

The prime minister personally lobbied rebels from his Labour Party who are threatening to vote against his reform today, one day before the release of a potentially explosive report into the suicide of a British expert on Iraq's weapons.

Most analysts believe Mr Blair will survive the twin threats of the vote and the report into scientist David Kelly's death but the raging row over Iraq's weapons of mass destruction looks set to plague him beyond what has been dubbed his "week from Hell".

The prospect of political turmoil unnerved financial markets. Jitters weighed upon the pound as it eased against the dollar and the euro, while dealers said the uncertainty surrounding Mr Blair was denting appetite for government bonds.

Foreign Secretary Jack Straw struggled yesterday to answer the conundrum of the whereabouts of Iraq's banned armaments in the wake of comments by chief US arms hunter David Kay, who said he did not believe Iraq had chemical or biological weapons.

Mr Straw told BBC Radio it was disappointing no weapons had been unearthed but refused to accept they did not exist.

"A great deal more evidence will emerge," he said. Mr Blair's public trust ratings have sunk following the failure to find Iraq's weapons - the main justification he gave for war. Mr Kay's comments, made as he quit his job last week, dealt a further blow to Mr Blair's credibility.

The erosion of Mr Blair's popularity has fuelled Labour Party dissent. The next general election is expected in 2005 and some Labour members are starting to view Mr Blair, once Labour's greatest electoral asset, as a liability.

The extent of Labour unrest will be seen today when members of parliament (MPs) vote on plans to make students pay more for university education through "top-up" fees.

Mr Blair could suffer his first defeat on a major policy issue over the reform. That would be humiliating given his massive parliamentary majority and it could trigger a confidence vote.

Locked in battle with rebels, the government made a further concession on the bill at the weekend and Mr Blair and his finance minister Gordon Brown made an eleventh-hour plea to opponents.

Mr Blair's spokesman said the vote was "too close to call" and said the prime minister would continue lobbying today.

"The vote isn't until 7 o'clock (1900 GMT) tomorrow night. The dialogue will be pretty continuous on the government's side," the spokesman said.

Opposition leaders, however, think the timing of the vote - one day before judge Lord Hutton reports on Kelly's death - could deter Labour waverers from voting against the bill.

Kelly slit his wrist after being outed as the source behind a BBC report that claimed Mr Blair had hyped the threat from Iraq.

Mr Hutton said yesterday he would make a statement on his findings at 12:30 p.m. tomorrow and Mr Blair will make a statement to parliament at about 2 p.m.

Mr Blair's government is in the dock over its role in exposing Kelly but Mr Hutton's inquiry also covered the case made for war.

Publicly, Mr Blair is confident he will still be prime minister at the end of the week but the odds against him are shortening.

British bookmakers William Hill yesterday cut the odds on him leaving his job at the end of the month to 12/1 from 20/1.