UK's Blair risks voter backlash after decade in office

LONDON, Apr 30 (Reuters) - British Prime Minister Tony Blair plans to announce his resignation soon after he passes the milestone of a decade in power this week but voters may sour his farewell by humiliating his party at the polls.

On Tuesday, Blair becomes only the second British prime minister in 100 years -- after former Conservative leader Margaret Thatcher -- to chalk up a decade in office.

He won the 1997 election by a landslide and went on to become the first Labour Party leader to win three elections in a row, but his image has been tarnished by the Iraq war, a party funding scandal and voter dissatisfaction with public services.

Two days after the anniversary, political analysts expect voters to deliver a stinging verdict on Blair's 10 years in power by deserting the party in droves in elections to Scottish and Welsh parliaments and in local council polls in England.

''It's got to be bad for Labour,'' said David Denver, politics professor at Lancaster University. ''Everything the government does turns to dust ... People are just tired of them.'' David Cameron, leader of the opposition Conservatives who lead Labour by up to seven points in opinion polls, is doing his best to turn the elections into a referendum on Blair, telling voters it is their ''last chance to vote against Tony Blair''.

Polls predict that a nationalist party committed to holding a referendum on Scottish independence from Britain will oust Labour as the biggest party in Scotland's devolved parliament.

Labour has been dominant in Scotland for 50 years.

A Scottish National Party win would be a severe embarrassment for Blair who sought to satisfy Scottish demands for more autonomy within a united Britain in 1999 by setting up the Edinburgh parliament with power over some Scottish affairs.

In English council elections, Labour is expected to lose hundreds of seats to Conservatives and Liberal Democrats.

BROWN IN DRIVING SEAT Within a week of the election, Blair will announce he is stepping down, kicking off a contest for the Labour Party leadership that finance minister Gordon Brown appears certain to win, automatically becoming Britain's prime minister.

Blair and Brown have been co-architects of Labour's policies over the last decade but have a troubled relationship.

The chance of a heavyweight contender emerging to challenge Brown for the leadership dimmed on Sunday when interior minister John Reid -- who had not ruled out a challenge -- predicted a ''coming together'' of Labour's leaders after the election.

Labour Party sources expect Blair to announce his resignation after Protestants and Catholics begin power-sharing in Northern Ireland on May 8, a milestone in Blair's efforts to end decades of conflict in the British province.

May 9 or 10 are seen as the most likely dates, meaning he could leave his Downing Street residence for good in early July.

Some Labour lawmakers say Blair's record has been spoiled by his support for the Iraq war -- April was the worst month for British casualties since the March 2003 invasion -- and by a sense of drift since the prime minister said last year he would leave office by September.

Blair's achievements -- a decade of unbroken economic growth, lower unemployment and greater investment in health and education -- are now taken for granted by voters, they say.

''Much of the good he's achieved has been overshadowed by the gross error of the Iraq war. This is a constant source of unhappiness,'' said Ian Davidson, a Labour member of parliament.

REUTERS SS VC1632