Blair suffers major parliamentary defeat

British Prime Minister Tony Blair suffered his first major Parliamentary defeat in more than eight years in power yesterday over new anti-terrorism powers, raising fresh questions about his future.

The elected House of Commons voted by 322 to 291 against plans to let police hold terrorist suspects for up to 90 days without charge, as nearly 50 members of Mr Blair's Labour Party refused to support him.

Police called for the new powers after Islamist suicide bombers killed 52 people in London on July 7. Critics say the powers would have been a huge infringement of civil liberties.

Parliamentarians later voted for a 28-day detention limit, up from 14 now.

Mr Blair vowed not to be deflected by his first reverse in Parliament since taking office in 1997 despite calls from the main opposition Conservatives for him to consider quitting.

"It's better some times to lose doing the right thing than to win doing the wrong thing," Mr Blair told BBC television.

Mr Blair, who won a third term in national elections last May, had recalled his two top ministers - finance minister Gordon Brown and Foreign Secretary Jack Straw - from trips abroad in an effort to win the vote.

He had also put his personal authority on the line, telling parliamentarians it was their "duty" to support the measure.

Not enough of his supporters listened.

"Mr Blair's authority has been diminished almost to vanishing point," said Conservative leader Michael Howard. "He is no longer able to carry his own party with him. He must now consider his position."

Bookmakers William Hill shortened the odds on Mr Blair leaving office before the end of next year, despite his determination to serve a full third term in power and party rules that make a leadership challenge very tough to mount.

Financial markets reacted swiftly to the defeat, the pound dropping nearly a 1/2 cent against the dollar after the vote.

"It highlights the weakness of Blair's leadership and increases the risk on UK assets but... the impact is likely to be short-lived," said Adam Cole, senior currency strategist of RBC Capital Markets.

In a round of television interviews, Mr Blair said he would not quit and would serve a full term.

But many critics and analysts say his decision not to fight another election has weakened his authority. The decision to recall Mr Brown from a Middle East trip for the vote will reinforce the view he is increasingly reliant on his likely successor.

The elections in May slashed Mr Blair's parliamentary majority to 66, about 100 less than he has been used to, meaning fewer than 40 Labour members can defeat him by voting with the combined ranks of the opposition.

He has had close shaves before, notably over waging war in Iraq, but had never previously lost in the Commons.

Richard Wyn Jones, political expert at Aberystwyth University, said Mr Blair's standing had definitely taken a hit.

"If 40 Labour members voted against him when the chips are down, when he's called in all the favours, twisted all the arms, that really does kick his authority," said Mr Jones.

Some Labour parliamentarians said this could be the first clash of many, particularly over health, welfare and education reforms that Mr Blair holds dear but many in his party oppose.

But Mr Blair said: "I don't think we will be defeated on those programmes at all."

Police had argued they needed the power to detain suspects for up to 90 days because anti-terrorist investigations can take considerable time, often involving international checks and the decoding of vast amounts of encrypted electronic data