Blair: I intend to be Prime Minister for a third term

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Leading article: Softly, softly

Tony Blair hinted last night that he intended to emulate Margaret Thatcher's 11 years in Downing Street by serving a third term as Prime Minister.

In the third and final part of his interview on BBC2's Newsnight, Mr Blair suggested for the first time that he would stay for another full term if Labour wins the next general election. His hint was a setback for the Chancellor, Gordon Brown, who has made no secret of his ambition to succeed Mr Blair and is the clear front-runner to do so. Although Downing Street insisted later that the Prime Minister had was "not saying any more than he has said before", Blair aides have started to raise the prospect that he might seek to remain in office for a full third term. This could mean him staying in power until 2009 or 2010.

Mr Brown's allies have suggested that Mr Blair promised to pave the way for Mr Brown to succeed him in 1994, when Mr Brown gave him a clear run for the Labour leadership. But the Blair camp insists there was no such deal.

Pressed by Jeremy Paxman on whether he planned to "carry on and on" and serve a third full term, Mr Blair replied: "Well, yes, but I'm honestly not getting into speculating about it. Please, I'm really not getting into the issue of whether I'm a 'go on and on and on' person or whether I'm a 'about to resign tomorrow' person. I think we have huge challenges still ahead. I have every bit as much appetite for the job as I have ever had and, despite the slings and arrows, it is a privilege to do it."

In the interview, Mr Blair makes clear his distaste that he had to be involved in raising money for the Labour Party. "If I could get shot of ever raising a single penny for the Labour Party ever again, would I not do it?" he said.

After a series of allegations that the Government has given special treatment for Labour donors, Mr Blair made clear he was attracted by the idea of state funding for political parties but admitted he did not know what to do about "a very, very difficult issue". He said: "You can't have a situation where we as a government use our majority to push it through. And I'm not sure the public would accept it either."

The Prime Minister defended Labour's decision to accept a £100,000 donation last year from Richard Desmond, the publisher of Express Newspapers and soft porn magazines. Asked how he reconciled taking money from a pornographer with his deeply held Christian values, Mr Blair insisted: "These funding stories, they come, they go! These are people who own the Express Newspapers. It is perfectly acceptable for us to take a donation from them."

Mr Blair also defended his controversial plan to cut the welfare payments of people guilty of anti-social behaviour. "We have to examine it to make sure it is practical," he said. "But as a matter of principle, I think it is right that with benefits come responsibility.

"If your child is engaged in persistent truanting, refusing to co-operate ... and everyone is at their wits' end, well, I'm sorry, but we shouldn't carry on paying out benefit to you in circumstances where you are not prepared to give anything back to society."

Mr Blair said that his Christian beliefs were very important to him. He added: "But I don't think it is sensible to start trying to view every decision as if it were a religious rather than a political decision."

Paxman v Blair the key exchanges

Round One:

Paxman: So when he [Stephen Byers] says he will be Transport Secretary by the time of the next election, you agree with that?

Blair: I never comment on reshuffles.

Paxman: He seems to think he will still be there.

Blair: Well, I never do, so. You can sit here and put the question any number of different ways, but I just don't.

Who won?: Paxman on points

Round Two:

Paxman: You would have no problem with history recording you as the man who killed the pound?

Blair: I would have no problem with history recording me as the person who said to the British people, "It is in our interests for us to be a key and major player in Europe and here is something that is in a single currency, is in our economic interests to do so."

Who won?: Blair on points

Round Three:

Paxman: When you go back to those old-fashioned values, how are they consonant with your party taking money from a pornographer?

Blair: Well, in my view, it is perfectly acceptable for us to take a donation from them.

Paxman: They also own Horny Housewives, Mega Boobs, Posh Wives, Skinny & Wriggly. Do you know what these magazines are like?

Blair: No, I don't, but I do know that if someone is fit and proper to own one of the major newspaper groups in the country, there's no reason why we shouldn't accept donations from them.

Who won?: A draw