Britain's Blair takes poll hit over sleaze row

LONDON, Mar 19 (Reuters) A ''cash-for-favours'' row threatening British Prime Minister Tony Blair has sent his approval rating to its lowest level since he come to power in 1997, according to a poll published today.

The controversy erupted this month when it was disclosed that several wealthy businessmen were nominated for seats in Britain's upper house of parliament after lending large sums of money to Blair's Labour Party.

A YouGov opinion poll put the Labour leader's rating at 36 per cent, which it said was his lowest as prime minister, while 54 per cent of those polled said they believed Blair had acted improperly in the loans scandal.

The row has compounded Blair's woes. He is battling a party revolt over his public service reform agenda and calls from some sections of the Labour party for a swift handover to his likely successor, finance minister Gordon Brown.

Under party funding rules, Labour did not have to declare the loans worth 14 million pounds, which helped bankroll Blair's third straight election victory in 2005.

But the suggestion there was a link between the loans and positions of responsibility has tarnished Blair's image.

''It's very ugly,'' said Labour lawmaker Clare Short, a vocal Blair critic who quit as a cabinet minister over the Iraq war.

''We're spending a lot more, we're getting rich people to fund it, and it is corroding our political system.'' A second opinion poll published today by ICM said seven out of 10 voters believed the Blair government, which promised to be ''whiter than white'' when it came to power, was just as sleazy as the Conservative government it ousted.

ELECTION TEST LOOMS Blair's authority has ebbed since he said he would not contest a fourth election, due by mid-2010. But analysts say as long as he is seen as an election winner, Labour lawmakers are unlikely to ditch him quickly.

Indeed, the ICM poll also showed that despite the latest bad publicity and a revival of the opposition Conservatives under new leader David Cameron, Labour would still win an election.

According to the poll, if there were an election now, Labour would snare 37 percent of the vote, with the Conservatives trailing on 33 per cent and the Liberal Democrats on 21 per cent.

And while 46 percent said Blair should step down now, 45 per cent said he should carry on.

The first real test of how damaging the row has been for Blair will come in May at nationwide local authority elections.

If Labour does suffer, and Labour lawmakers start worrying about losing their jobs at the next election, analysts say the pressure on him to step aside will intensify.

REUTERS DKS PM1732