A Week in Politics: Blair waits on the fence for US election result

Here is a state secret: in his heart of hearts, Tony Blair wants John Kerry to be the next US President. But his head tells him that George Bush will win a second term in November.

On the face of it, a Kerry win would leave Mr Blair dangerously exposed. If John Howard loses power in Australia's October election and President Bush joins Spain's Jose Maria Aznar in the political graveyard, Mr Blair would be virtually the last leader standing who supported the Iraq war.

Despite his alliance with Mr Bush, the chameleon-like Mr Blair would soon do business with a Democratic president. Britain and the US could reconstruct a new world order, based on the United Nations, allowing intervention in failed states but with military action a last resort. In a dream scenario, a Bush defeat might even help Mr Blair draw that elusive line under Iraq. For good measure, a Kerry and Blair partnership would work to "save the planet".

Mr Blair is keeping any such thoughts very secret. An unprecedented edict has gone out to everyone, from senior cabinet ministers to officials in charge of paper clips: don't do anything that could be interpreted as taking sides in the presidential election.

The Prime Minister's paranoia has upset many people in the Labour Party and their natural allies in the Democrats. After all, it was Mr Blair and Gordon Brown who were accused of trying to "Clintonise" Labour after the party lost in 1992 and the Democrats won. New Labour learnt much from the Democrats as the two parties grew away from their traditional roots and began to appeal to the aspirational middle classes.

Even some Blairites are perplexed. Next week, the modernisers' group Progress will come out in favour of Mr Kerry. In its journal, Progress will attack Mr Bush, saying he delivered "conservatism" without "compassion" and acted with "cynicism" without "civility." Instead of leading the world after the 11 September attacks, Progress will say, the President has tried to bully it and "not even begun" to fight the necessary "battle for hearts and minds".

Robert Philpot, the director of Progress, told me: "At all levels of the party, Labour's members are united in the hope that next January there will be a new administration in Washington, committed to pursuing a progressive agenda. Our editorial simply reflects the overwhelming support in the party for John Kerry."

Some modernisers believe Labour should be allowed to take sides in the US election, and want Mr Kerry to speak at Labour's annual conference later this month, as Bill Clinton did two years ago. To be even-handed, they say, Mr Blair should meet Mr Kerry; by refusing to do so, he is, in effect, backing the Bush campaign. Indeed, there was prolonged applause at the Republican convention when the President praised Mr Blair in his speech on Thursday.

Mr Blair is not going to change his approach. In fact, it has been reinforced by reports from Labour aides who visited America this summer and met members of the Kerry campaign.

The word in Labour circles is that the Democratic candidate lacks the "X-factor" that Mr Clinton had. Unofficial emissaries believe Mr Bush will succeed in turning the contest into a "security election", with the war on terrorism eclipsing the economy and jobs. Most judge that there can only be one winner then: Mr Bush.

"I suspect the election result was pretty much decided on September 11," one Labour official told me. "Some Democrats don't understand why we have kept our distance. But It looks as though a judgement has been made [in Downing Street] that the Americans will hold on to nurse."

It is not just Labour that has upset its natural soulmates across the pond: the Tories have fallen out badly with the White House because Michael Howard refusesunequivocally to support the war in Iraq. We are in an era of political cross-dressing: Mr Blair refuses to meet Mr Kerry, while Mr Bush will not grant Mr Howard an audience.

Some Tories want a Kerry victory. Simon Burns, a frontbench health spokesman, will tell GMTV's Sunday Programme tomorrow that many Tory MPs would not vote for Mr Bush and hope he loses "because he's a disaster". Mr Kerry would restore respect for America, which is now "loathed and detested by people who should be their natural allies and friends".

Efforts to rebuild relations with the Republicans are under way. In a gesture of reconciliation, Liam Fox, the Tories' co-chairman, was given a seat next to Karl Rove, the President's closest aide, for his big speech in New York.

Perhaps traditional left-right labels and alliances matter less in a world at war with terror, and when ideological differences between the parties in both countries have narrowed as they court swing voters in the centre ground. Perhaps the Prime Minister has made a sober and sensible judgement: intergovernment relations matter much more than those between parties.

Mr Blair will surely find it much harder than Mr Bush to turn Iraq and terrorism to his advantage. True, there may not be many votes for the Tories in Iraq because the party supported the war. But I suspect Mr Howard is right to put some light between himself and the PM.

With an election looming, Mr Blair hopes his problems in his own party over Iraq are coming to an end. But he accepts that he still has a lot to do to convince many voters.