Britain's Tony Blair, in the roughest patch of his premiership, gave his restive Labour Party a choice: stick with him and stay in power or return to the dark days of opposition. How could they refuse?

Many Labour loyalists are up in arms over Blair's decision to wage war on Iraq and over planned reforms to healthcare and education. But they know an election winner when they see one.

Mid-term blues and a gruelling summer of dire headlines after the suicide of a government expert on Iraqi weapons have crushed Blair's public trust ratings but polls still show him ahead of his rivals and poised to win a historic third election.

That was a reality Blair was not going to let Labour forget this week at what was billed as the toughest annual party conference since he took the reins of Labour in 1994.

"He made it clear that this is the leader I am, take me or leave me on this basis, and my feeling is that they will take him," Clive Soley, a senior Labour lawmaker said.

Blair's speech to the conference - delivered on Tuesday to rapturous applause - will not win over his opponents.

Anti-war Labour members are seething over Blair's decision to attack Iraq. Protest banners label him "Bliar" or a "Liar-bility". Left-wingers and powerful trade unions, Labour's bankrollers, want a return to the party's socialist roots.

But confident in his position, Blair was uncompromising - no apology was offered for Iraq and there was no "reverse gear" on policies on schools and hospitals that anger left-wingers.

"He talks over our heads to Middle England," protest singer and songwriter Billy Bragg told Reuters at the conference.

Blair, who led his historically fractious party out of 18 years in the political wilderness, knows it is Labour's newfound middle-class appeal that wins elections.

He can be thankful the opposition Conservative Party has failed to capitalise on his recent woes and is fumbling to find direction. But internal opponents still promise a rough ride.

"Blair has got to change or we have got to change Blair," said Clare Short, who resigned from the government over Iraq and has become one of the prime minister's harshest critics.

Union and left-wing activists are threatening to mount an increasingly organised challenge to Blair's policies and now they are not afraid to speak out.

"His head is buried in the sand," said Labour lawmaker Bob Wareing. "Day after day, week after week, people are leaving the Labour Party."

Before Blair's speech, a poll showed 41 per cent of Labour members want him to resign before the next election, expected in 2005. Many want finance minister Gordon Brown to replace him.

Brown pressed all the right Labour buttons in his speech to the conference this week, making a pitch for the leadership and firing up tensions in what has been the government's most powerful political partnership.

He was photographed with his arms firmly crossed as Blair soaked up a 7-1/2 minute standing ovation on Tuesday.

Blair dashed any ambitions Brown may harbour, saying he will stand in the next election and serve a full third term.

And no matter how rebellious his party gets, Blair has the comfort of knowing that Labour has never sacked a leader, not least one that has proved its biggest electoral asset.

"It's the only leadership I can offer. And it's the only type of leadership worth having," was his message.

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