Blair prepares plans to deal with mayoral win for Livingstone

Tony Blair is drawing up contingency plans on how to handle Ken Livingstone as mayor of London as part of a more "hands off" approach to the devolved bodies that run Scotland, Wales and London.

The Prime Minister wants to shed his image as a "control freak" after running into criticism over his attempts to dictate events in Edinburgh, Cardiff and the new London government to be headed by the country's first directl elected mayor.

Mr Blair wants to avoid a damaging confrontation with Mr Livingstone if he becomes mayor, which he believes would harm Labour's general election prospects. Initially at least, he will give the left-wing MP a chance to show he can govern the capital responsibly.

Labour members of the Greater London Assembly will be encouraged not to veto Mr Livingstone's budget proposals or key appointments provided he acts reasonably. Doing so could create "gridlock", which would paralyse London'snew administration and undermine Labour's devolution programme.

However, Blair aides are sceptical about whether Mr Livingstone will respond positively. "He is an oppositionist and, sooner or later, he will be looking to blame the Government when he becomes a flop," said one party source. "People will have very high expectations of him that will be difficult to fulfil." A senior Downing Street source said: "We will give him enough rope to hang himself. He'll have his rights, but he'll also have to take responsibility if things go wrong." Mr Blair intends to adopt a similar approach to the new Scottish Parliament and Welsh Assembly as he learns lessons from the first year of devolved government. At the weekend Mr Blair admitted he was wrong to seekto block Rhodri Morgan'sattempt to become First Secretary in Wales, saying: "Essentially you have to let go of it with devolution."

Mr Livingstone, who is running as an independent, predicted that Mr Blair would eventually agree with him. "He knows I will not be a catastrophe," he said. "I suspect in a few years he will say, 'I made a mistake and Ken is great.'"

Downing Street denied any parallel between Mr Morgan and Mr Livingstone. "One isthe leader of the Labour Party in Wales; the other is standing as an independent," said Mr Blair's official spokesman.

Mr Blair's aides denied the contingency plans meant he had written off Frank Dobson's chances of defeating Mr Livingstone in next month's mayoral elections. Tomorrow he will campaign alongside Mr Dobson for the first time since he defeated Mr Livingstone to become Labour's official candidate in February.

Yesterday Mr Dobson launched his 10-point plan to improve London, including plans to create 100,000 jobs,reverse the rise in street crime, renew the underground system by 2010 and provide free bus passes for under-18s within a year.