KEY POINTS:
EDINBURGH - Tony Blair endorsed long-standing finance minister Gordon Brown as Britain's next leader today and said he would announce next week when he was stepping aside as prime minister.
Ten years after the landslide election win that swept Labour to power, Blair said now was the time
for a new team to run Britain and Brown would make a "great prime minister".
"Within the next few weeks I won't be the prime minister of this country," Blair told a Labour Party rally in Scotland, where his party is set for a drubbing in elections on Thursday.
"In all probability a Scot will become prime minister of this country and that's someone who built one of the strongest economies in the world and who I've always said would make a great prime minister."
Blair, Britain's second-longest serving leader in a century, was forced to say last year he would quit after bitter in-fighting between his backers and a Brown camp impatient for power after a decade in the prime minister's shadow.
Many in Blair's party never forgave him for sending British troops to Iraq in 2003 despite public opposition, and his refusal to call for a ceasefire in the Lebanon war last year was regarded as a catalyst for the revolt.
Anger over Iraq and disillusionment with Labour whittled the party's huge 1997 majority of 179 down to 66 in 2005 and the opposition Conservatives lead comfortably in opinion polls.
"Tony Blair's time as prime minister started with great hope but has ended with disappointment," said Conservative leader David Cameron. "Tony Blair will be remembered as a successful party leader but not as a good prime minister."
Blair is expected to announce his resignation within days of elections to Scottish and Welsh parliaments and English councils on Thursday, in which Labour is predicted to get a drubbing.
The latest speculation is that Blair will throw in the towel soon after Northern Ireland's assembly meets next Tuesday, drawing a line under three decades of violence in the province.
Despite securing peace in Northern Ireland, polls show Britons rank Iraq as Blair's biggest mistake.
"He had the inheritance -- a golden inheritance -- he had the personable ability and remarkable political gifts to be a great prime minister and I'm afraid that history will say he fell short of that," said Paddy Ashdown, leader of the Liberal Democrats at the 1997 election, told BBC Radio.
Blair's departure will trigger a seven-week contest for the Labour leadership that Brown seems certain to win, automatically becoming Britain's prime minister until the next general election which must held in May 2010 at the latest.
Blairites have tried but failed to establish a credible challenger. Their last hope, Environment Secretary David Miliband, endorsed Brown as leader last month.
While doubts remain over Brown's ability to fend off the Conservative challenge and win a fourth straight Labour term for the first time, there were fears a leadership battle might prompt party turmoil and make it unelectable.
Blair's endorsement of Brown -- they were twin architects of Labour's rise to power after 18 years in opposition -- came after the finance minister paid him a glowing tribute on Tuesday in Britain's best-selling newspaper the Sun.
"Under his leadership New Labour has been built to last," wrote Brown.
"I am honoured to call Tony my oldest friend in politics, of course with the inevitable ups and downs along the way."
- REUTERS