"Thank you all very much. It's a great privilege to be here with you again today and to thank all of you for such a wonderful and warm welcome.

And especially Maureen and her friends, who gave me such a wonderful welcome. The only thing is, when I was coming in she said "Four more years!", and I had to say, "Maureen, that's not on message for today".

I just have to say a special word of thanks for John Burton. John has been my agent for many years now and he is still the best political adviser I have got. In all the years I have known him he has always been steadfast in his loyalty to me, to the Labour Party, and to Sunderland Football Club, not necessarily in that order. We won't get into that. It has been my great good fortune at certain points in my life to meet exceptional people, and he is one very exceptional person.

And also if I may refer to another exceptional person, who's my wife, friend and partner, Cherie.

Blair casts himself as EU president candidate

Speaking on French TV, Tony Blair sang the praises of the EU and sketched his agenda for its future, all in fluent French

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And the children, of course, Euan and Nicky and Kathryn and Leo, who make me never forget my failings, but give me great love and support.

So, I have come back here to Sedgefield, to my constituency, where my political journey began and where it is fitting that it should end. Today I announce my decision to stand down from the leadership of the Labour Party.

The party will now select a new leader. On 27 June I will tender my resignation from the office of Prime Minister to the Queen.

I have been Prime Minister of this country for just over 10 years. In this job in the world of today I think that's long enough, for me and more especially for the country.

And sometimes the only way you can conquer the pull of power is to set it down.

It is difficult in a way to know how to make this speech.

There's obviously judgments to be made on my premiership and in the end that is for you the people to make. I can only describe what I think has been done over these last 10 years, and, perhaps more important, why I tried to do it.

And I never quite put it this way before.

I was born almost a decade after the Second World War. I was a young man in the social revolution of the Sixties and Seventies. I reached political maturity as the Cold War was ending, and the world was going through a political and an economic and a technological revolution.

And I looked at my own country: a great country, wonderful history, magnificent traditions, proud of its past, but strangely uncertain of its future. Uncertain about the future, almost old-fashioned.

And all of that was curiously symbolised, you know, in the politics of the time. You had choices. You stood for individual aspiration and getting on in life, or for social compassion and helping others. You were liberal in your values, or conservative. You believed in the power of the state, or the efforts of the individual. Spending more money on the public realm was the answer, or it was the problem. And none of it made sense to me. It was 20th century ideology in a world approaching a new Millennium.

Of course people want the best for themselves and for their families. But in an age where human capital is a nation's greatest asset, they also know it is just and sensible to extend opportunities, to develop the potential for all of our people, not just an elite at the top.

People today are open-minded about race and sexuality, they are averse to prejudice, yet deeply, rightly, conservative with a small 'c' about good manners, respect for others, treating people courteously. They acknowledge the need for the state and the responsibility of the individual. And they know spending money on our public services matters, and they know it is not enough. How they are run and organised matters too.

So 1997 was a moment for a new beginning. The sweeping away of all the detritus of the past. And expectations were so high. Too high, probably. Too high in a way for either of us. And now in 2007 you can easily point to the challenges, or the things that were wrong, or the grievances that fester.

But go back to 1997. Think back. No, really think back. Think about your own living standards, then, in 1997, and now. Visit your local school, any of them round here, or anywhere in modern Britain. Ask when you last had to wait more than a year on a hospital waiting list, or heard of pensioners freezing to death in the winter unable to heat their homes.

There is only one government since 1945 that can say all of the following. More jobs. Fewer unemployed. Better health and education results. Lower crime, and economic growth in every quarter.

Only one government. This one.

But we don't need statistics. There is something bigger than what can be measured in waiting lists or GCSE results or the latest crime or jobs figures. Look at the British economy - at ease with globalisation. London - the world's financial centre. Visit our great cities in this country and compare them with 10 years ago. No country attracts overseas investment like we do.

And think about the culture of Britain in the year 2007. I don't just mean our arts, that are thriving, I mean our values. The minimum wage. Paid holidays as a right. Amongst the best maternity pay and leave today in Europe. Equality for gay people.

Or look at the debates which reverberate around the world today. The global movement to support Africa in its struggle against poverty. Climate change. The fight against terrorism. Britain is not a follower today. Britain is a leader. It gets the essential characteristic of today's world: its interdependence.

This is a country today that for all its faults, for all the myriad of unresolved problems, of fresh challenges, it is a country comfortable in the 21st Century, at home in its own skin, able not just to be proud of its past but also confident of its future.

You know I don't think Northern Ireland would have been changed if Britain had not changed. Or the Olympics won if we were still the Britain of 1997.

And as for my own leadership, throughout these 10 years, where the predictable has competed with the utterly unpredicted, right at the outset, one thing was clear to me: without the Labour party allowing me to lead it nothing could ever have been done. But I also knew my duty was to put the country first. That much was obvious to me when just under 13 years ago I became Labour's leader.

What I had to learn, however, as Prime Minister, was what putting the country first really meant. Decision-making is hard. You know everyone always says in politics, listen to the people. The problem is, you find they don't always agree. When you are in opposition you meet this group and they say: "Why can't you do this?" And you say, "It's a really good question, thank you." And they go away and say, "It's great, he really listened." And you meet that other group, and they say, "Why can't you do that?" and you say, "That's a really good question, thank you." And they go away happy that you listened.

In government, you have to give the answer. Not AN answer - THE answer.

And in time you realise that putting the country first doesn't mean doing the right thing according to conventional wisdom, or the prevailing consensus or the latest snapshot of opinion. It means doing what you genuinely believe to be right. That your duty as prime minister is to act according to your conviction.

And all of that can get contorted, so that people think that you act according to some messianic zeal. Doubt, hesitation, reflection, consideration, reconsideration, these are all the good companions of proper decision-making. But the ultimate obligation is to decide.

And sometimes the decisions are accepted quite quickly. Bank of England independence was one that gave us our economic stability. Sometimes, like tuition fees or trying to break up the old monolithic public services, the changes are deeply controversial, hellish hard to do, but you can see you are moving with the grain of change around the world. And sometimes, like with Europe, where I believe Britain should keep its position strong, you know you are fighting opinion but you are kind of content with doing so.

And sometimes, as with the completely unexpected, you are alone with your own instinct. In Sierra Leone, and to stop ethnic cleansing in Kosovo, I took the decision to make our country one that intervened, that did not pass by, or keep out of the thick of it.

And then came the utterly unanticipated and dramatic - September 11 2001, and the death of 3,000 or more on the streets of New York. And I decided we should stand shoulder to shoulder with our oldest ally. And I did so out of belief. And so Afghanistan, and then Iraq, the latter bitterly controversial. And removing Saddam and his sons from power, as with removing the Taliban, was done with relative ease - but the blowback since, in global terrorism and those elements that support it, has been fierce and unrelenting and costly. And for many, it simply isn't and can't be worth it.

For me, I think we must see it through. The terrorists who threaten us around the world will never give up if we give up. It is a test of will and belief, and we can't fail it.

So, some things I knew I would be dealing with, some I thought I might be, and some never occurred to me - or to you - on that morning of 2 May 1997 when I came into Downing Street for the first time.

Great expectations. Not fulfilled in every part, for sure. Occasionally people say, as I said earlier, the expectations were too high, you should have lowered them. But to be frank, I wouldn't have wanted it any other way. I was and remain, as a person and as a prime minister, an optimist. Politics may be the art of the possible, but at least in life give the impossible a go.

So, of course, the visions are painted in the colours of the rainbow, and the reality is sketched in duller tones of black and white and grey.

But I ask you to accept one thing. Hand on heart, I did what I thought was right.

I may have been wrong. That is your call. But believe one thing, if nothing else. I did what I thought was right for our country. And I came into office with high hopes for Britain's future and, you know, I leave it with even higher hopes for Britain's future. This is a country that can today be excited by the opportunities, not constantly fretful of the dangers.

And people say to me it's a tough job. Not really. A tough life is the life led by the young severely disabled children and their parents who visited me in Parliament the other week. Tough is the life my dad had, his whole career cut short at the age of 40 by a stroke. Actually, I have been very lucky and very blessed.

And this country is a blessed nation. The British are special. The world knows it. In our innermost thoughts we know it. This is the greatest nation on earth. So it has been an honour to serve it.

I give my thanks to you, the British people, for the times that I have succeeded, and my apologies to you for the times I have fallen short. But good luck."

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