It didn't exactly equate to smooth sailing, but Tony Blair can enjoy a glass of champagne in celebration of his third consecutive term as Prime Minister today after securing a majority win for his Labour Party. While the Conservatives ate into that majority by creating a swing of almost a hundred seats, Blair still has a significant margin of 66 seats despite worries that the Iraq War might force Labour to govern from a minority. Blair focused on the positive as he announced his intention to form the new government:

Tony Blair has said that he has "listened" to the British public and has a clear idea of what they want for Labour's historic third term in power.

Mr Blair spoke outside Number 10 after visiting Buckingham Palace, where the Queen asked him to form a new Government, following the election victory. ...

"The Queen has asked me to form a new government which I will do. It's a tremendous honour and a privilege," Mr Balir said.

He told the press gathered outside Downing Street that he had "listened and learned" and his Government would now "focus relentlessly" on the priorities of the British people.

He promised "a radical programme of legislation" and said he would place particular priority on re-establishing respect in classrooms and on the streets.

Mr Blair had earlier acknowledged that Iraq had been a "divisive" issue, but called on the country to unite.

"It is clear that the British people wanted the return of a Labour Government, but with a reduced majority. We have to respond to that sensibly and wisely and responsibly."

Despite a sense of momentum swinging back towards the Tories and a respectable election result, Conservative leader Michael Howard shocked Britons by resigning his post as party leader after failing to topple the popular Blair:

Michael Howard, the Conservative leader, has announced that he is to step down from his position "sooner rather than later", and that he will not lead the party at the next election.

Mr Howard had conceded defeat in the general election at about 4.15am, saying that his party had made "a significant step towards recovery" after a strong showing in the polls.

But speaking in Putney, taken back from Labour last night by Justine Greening, he said that he would step aside when "the party has had the opportunity to consider whether it wishes to change the rules governing the choice of his successor".

Mr Howard said that he was now 63 and that by the next election he would be too old to lead the party.

Howard made a few foolish statements in the campaign's final days about accepting nothing less than total victory over Labour as anything but a defeat. Trying to rally a party from a 166-seat deficit in one election after the sitting government successfully prosecuted a war is and should be a monumental task, and not one for breezy predictions or standard-setting. Having said it, though, Howard made it difficult to continue his leadership in the absence of that specific result.

In fact, Howard may be right in resigning anyway. After initially supporting the Iraq War, Howard tried to beat Blair over the head with it, issuing contradictory and confusing blasts about supporting the effort but decrying the "lies" that led to it. Howard never made clear why he supported the war effort if he felt that Blair based it on lies, nor did he specifically show that Blair lied about Iraq at all. Howard basically absorbed the arguments of the radical anti-war crowd and grafted them onto the Conservative platform, a strange operation that may have attracted a few more votes but gave most Britons little confidence in Howard's ability to govern.

Blair now has a mandate to continue his course in Iraq, if he so chooses. The worst of Iraq is behind him, and the next election could be as far off as 2009. It gives him a freedom to act that did not exist in the previous few months, given the tight victory that he achieved last night. Meanwhile, the Tories have an opportunity to select a leader with better political skills and a clearer message to match up against Labour in the next cycle. All of these look like good news for Britain, and good news for the US.

UPDATE: Mark Steyn live-blogged the elections, and gives us his spot-on analysis:

9.30am BST Yes, Labour's 60-65 majority was achieved with only 36% of the vote - an all-time low for a winning party in Britain. That reflects an election in which the traditional party labels didn't quite capture the real divisions in the electorate. Nonetheless, I'd say it's worse news for the Tories - not just because it's an unprecedented third consecutive loss for the party but because such recovery as there was was so pathetic. In the days before the election, a lot of Tories told me that the real measure of their success was whether and by how much they'd break the 200-seat barrier. And even that was a conscious effort to lower expectations. The Conservatives are presently on 195 seats. That would have been regarded as a disaster for Thatcher, Major or even William Hague, and swift resignation would have followed. The Tory leadership's ability to spin this as a great "improvement" is confirmation of just how shrivelled the modern British Conservative Party really is.

And three hours later, Howard resigned. Coincidence, or prescience? I'm opting for the latter, having followed Steyn for quite some time. Be sure to read the rest of his live-blog.

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