Leading article: Blair's monument crumbles

The end of the Blair era has seen the remarkably rapid collapse of what suddenly looks like a tired government. Only a year and a half after it was re-elected with a comfortable majority in the House of Commons, the Blair administration looks hollowed out, exhausted and overdrawn at the bank of moral credit.

Last week marked the end of Tony Blair's attempts to present himself as the purveyor of higher standards of ethical conduct in public life than what had gone before. No one should have thought that the Prime Minister was going to face charges personally in the cash-for-honours inquiry, so the fact that the police interviewed him as a witness rather than as a suspect is scant comfort to him. As he said a while ago, the buck stops with him. He approved the taking of secret loans to finance his final election campaign, and he nominated four of the secret lenders for peerages.

His attempt last week to defend his decisions by saying that they were nominated as Labour Party working peers came close to self-ridicule. It is not the first thing that anyone would say about Barry Townsley, stockbroker, and Sir David Garrard, property developer, that they have a record of service to the Labour cause - unless of course such service is defined in purely monetary terms. As we report today, according to their citations the nominees were under the impression, that they would be elevated to the ermine for their charitable and educational work.

In the past, this newspaper has given Mr Blair some credit for bringing in a new system of open disclosure of party funding. And it is fair to say that, under previous Conservative and Labour governments, the equivalents of Sirs David and Gulam, Mr Townley and Dr Patel would have been in the House of Lords by now and no one would ever have known about the money. We only know about their secret loans because The Independent on Sunday reported them last year. Mr Blair has destroyed his credibility by setting up a system of openness and then bending his own rules to try to get round it.

That was not the only hypocrisy of his decaying government last week. The abandonment of the Serious Fraud Office inquiry into allegations of bribery in a Saudi defence contract was an act of cowardice that puts paid to Mr Blair's claim to an ethical foreign policy. The Prime Minister was blunt in defending it, as good as saying that it was vital to keep the Saudi royal family sweet because we need their help - for which read their oil wealth - in dealing with al-Qa'ida, and with the Israel-Palestine problem. But how does it promote democracy and the rule of law in the Middle East to appease what so many people regard as a corrupt regime?

The timing of these bad news stories on the day of the report into the death of Diana, Princess of Wales, was also counterproductive. Not only did Mr Blair arrange to meet his police interrogators on Thursday, and Lord Goldsmith to make his "uncomfortable" announcement on the Saudi corruption case. But the Government also announced its approval of new runways at Heathrow and Stansted, in flat contradiction of its new green concern. And the closure of 2,500 post offices, which may be right but is certainly locally unpopular. The suspicion of New Labour's news management now runs so deep that the charge of spin intensifies each charge against Mr Blair's integrity. Instead of burying embarrassing news stories, such crude manipulation raises them up for all to see.

Large pieces of masonry are falling off the Blair monument. Gordon Brown is trying desperately to escape from the wreckage. It should not be difficult for him to distance himself from the loans-for-lordships business, because almost the whole point of it is that only three people knew everything (Mr Blair, Lord Levy, his fundraiser, and Matt Carter, the former Labour Party general secretary). But in the panic last week, the Chancellor accused the Prime Minister's people of trying to drag him down with the temple. The charge was that No 10 had encouraged journalists to ask questions about the possibility of peerages for the Chancellor's friends.

All this drama of a government collapsing from within takes place against a backdrop of grim images of carnage in Iraq. So familiar that they hardly register individually, these scenes of grieving relatives and the twisted metal remains of car bombs nevertheless are a constant subliminal reminder of the disaster of Mr Blair's foreign policy.

At this rate, Mr Blair is going to leave the public stage next year a diminished man, his many achievements disregarded. But he has only himself to blame.