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An early challenge to Blair is expected, analysts say

Despondent Labour figures were Thursday night struggling with the paradox of a historic third term and the possibility of their leader, Tony Blair, being pressed to stand down sooner rather than later.

Blairites were stressing the fact of a third term, as they worried privately whether he could survive on a reduced majority.

The pressure from within sections of the party, and the struggle to avoid repeated defeats on the floor of the Commons, may make it difficult for Blair to stay at the helm for long. Few expect him to last beyond 2006, and some believe he will go more quickly. Those close to the prime minister also think he will last only a short time.

His departure may turn on whether the French vote for the EU constitution at the end of the month requires Britain to go ahead with its own referendum. The most obvious short-term point of departure would be after the British presidency of the G8 and Europe in the second half of the year.

Labour officials also insisted they had warned in the last few days of the campaign that there was a switch to the Liberal Democrats.

They had hoped that their message had been understood that if one in 10 Labour voters abstained or defected, a Tory government would emerge. They had also warned of a differential swing in the marginals, even though many had been sceptical about the reports of Labour headquarters' nerves.

Before the election, Chris Mullin, Labour's first winner of the night, warned privately of the "dangerous mood around. Some people seem to think they can have a Labour government without voting Labour."

The health secretary, John Reid, was the first to take up the early loyalist theme saying: "It has never been done before. It is historic. No one has done it since Margaret Thatcher."

He deflected claims that voter anger with Blair had led Labour to lose seats: "If we hadn't been encumbered with the difficult decisions of government no doubt we would have had 100 percent support ... Being in government means we have to make difficult decisions."

Reid said the Tories had flopped: "Eight years after the biggest ever electoral defeat, the Conservatives have hardly moved."

David Blunkett, likely to return to the cabinet today, said it was unsurprising that normal politics had returned.

Alan Milburn, the election coordinator, admitted Labour now expected to have a lower majority. But if the exit polls and initial results were right "it's a pretty tremendous achievement and vindicates the sort of campaign we have run and what we have done in government."

Milburn said for the Tories there was "no shortcut back" and if the projections were right it was a "disastrous result" for them.

Lord Falconer, another close ally of Blair, said: "The critical point is that the prime minister has led the government into a third term. Blair will have have been vindicated."

But privately Labour saw the results as far worse than they had expected. They were jolted by the exit poll lead of 3 points, unnerved by the loss of the Labour vote in the early returns with swings to the Liberal Democrats, and even more alarmed by reports on the ground that seats were falling over the country, including many that they had not expected to be vulnerable.

Reports started pouring in across London, Kent, the wider south-east and the Midlands that seats were falling.

Most Blairite loyalists before the election had predicted the prime minister was safe so long as he secured a majority of between 60 and 70. If he took the party over 100, he would be free to snub his nose at his critics, and claim New Labour was alive and well.

Instead, as the results started, it took only minutes for Labour leftwingers to demand that Blair take responsibility for the reverses.

Paul Flynn, the Newport MP, and Lynne Jones, the Birmingham Selly Oak MP, called for him to stand aside.

Roy Hattersley said he doubted that the prime minister would last the length of the next parliament.

A reduced majority, he said, "would put pressure on the prime minister to go whether he wants to or not." But he did not blame Blair for saying that he would serve a full third term, arguing he had no alternative but to promise that he would run the full course.

Soon after Clare Short had said Labour would have done better with another leader, Robin Cook, who also resigned from the cabinet over the Iraq war, said the conflict had cost Labour votes. Voters in his Livingston seat had refused to support Labour because of the war, showing the extent of resentment, he said.

"Even in Livingston I have had a number of people saying to me that they can't vote for me because they were against the war in Iraq. Heaven knows what more I could have done to convince them that I also was opposed to the war."

The fact that Blair himself had not enjoyed the campaign, and felt personally hurt by the repeated accusations that he had lied over the war, will add to the sense that he will not linger.
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