New Labour's new modesty suit may strike many as a touch unconvincing but it will serve Britain's governing party well before the week is out. For by Friday morning Mr Tony Blair is likely to be confronted by hundreds of council seat losses to the Tories - and the election of a London mayor who says capitalism has killed more people than Hitler.

Just three years ago Mr Blair led his wife and children into Downing Street to the adulation of his supporters and the general relief of a country grown contemptuous of the Conservative Party.

The widespread assumption is that he will call a general election in May or June of next year - and all the evidence suggests he will win it.

Yet there was no party yesterday, no sign of celebration, no love-in with celebrities in a West End theatre, no olympian statement about a Britain transformed, leading Europe and the world - nor any reminder that Tony once seemed to walk on water. Just the modest campaign theme for the English council elections - a lot done, a lot to do - and a strong suggestion that the Prime Minister may be preparing to apologise for the fiasco of Labour's London mayoral campaign.

Mr Blair has had some practice recently. After Alun Michael's spectacular fall, the Prime Minister admitted he had been wrong to devote such energy to trying to prevent Rhodri Morgan's emergence as first secretary in Wales.

However, Mr Morgan and Mr Livingstone are not two of a kind. And Mr Blair is unlikely to repent for the savagery of his attacks on "Red Ken" during Labour's discredited selection process.

Mr Blair just couldn't believe Mr Livingstone's comments about last year's anti-capitalist riots in the City of London; citing his calls for Gordon Brown's dismissal as evidence of "a total disregard for sensible, mature politics". And he made it clear he held Mr Livingstone among those responsible for Labour's wilderness years.

"It was not until the mid-1990s that we recovered and Labour in London really started to punch its weight. The leading figures in the party were people like Ken Livingstone, Tony Benn and Arthur Scargill. The policies were not just disastrous for Labour, they deprived the public of a choice that wasn't the Tories," he declared last November. "Now, this is the issue: has Ken really changed?"

Mr Blair will have no choice but to bow to London sentiment if, as expected, Mr Livingstone becomes Britain's first directly elected mayor. However, it seems there will be no rush for a photocall outside Number 10; rather an acknowledgement that Labour's attempted "fix" had alienated people, and judgment suspended on the question of Mayor Livingstone himself.

Many commentators believe the former GLC leader has changed - indeed that, much to the Prime Minister's irritation, he is the mirror-image of Mr Blair himself. Certainly if the campaign is anything to go by, Mr Livingstone holds no terrors for the City. Like Mr Blair before him, Mr Livingstone has constructed a wide coalition of support.

Some fancy the most swiftly disillusioned will be those from the left who really do expect him to re-create the people's republic.

Mr Livingstone has insisted all along that he would seek to work with the government. According to one weekend report, Mr Blair is ready to put this to the test, while apparently convinced that Mayor Livingstone will play true to leftwing form and find himself ejected by the electors in four years' time.

Yet, from some of yesterday's headlines, you might get the impression that Mr Blair won't be around to see it. "Mayday, Mayday" screamed a page one editorial in the Sun: "Blair in crisis over Rover, NHS, asylum and law and order." Quoting the old dictum that oppositions seldom win elections, governments lose them, the paper warned: "What we are witnessing . . . is the Blair administration starting to LOSE the next election."

Given the crucial role played by the paper last time, this can only have made for grim reading in Number 10. Yet it hardly seemed a complete or true reflection of the state of a government presiding over a 170-plus majority in the Commons, and a successful economy to boot.

True, the booming economy is still more a south-eastern experience - the problems of manufacturing industry in the north and the motor and textile industries in the midlands are proof of an economic divide Mr Blair appears to deny.

True, too, that William Hague finds a resonance for his views on asylum-seekers, crime against home owners, and Section 28 and the "promotion" of homosexuality in schools.

The Guardian yesterday divined opportunity for Labour to start making sense of its claim to be a "progressive" force as the Tories eagerly defined themselves "as the party of xenophobes, homophobes and gun-toting vigilantes".

It would be foolish to underrate Mr Hague's success in reconnecting his party with millions of traditional supporters who abandoned it in 1997. Liberal commentators might sneer at his "in Europe but not run by Europe" line but ex-Tories who opted last time for the Referendum and UK Independence parties do like it.

So, for all the sniffiness, there is wisdom in what Mr Hague has been attempting since before last year's European election. The point, though, is that this reconnection is still seen as part of his strategy for remaining leader of the Opposition in the next parliament.

THE TORIES can hardly fail to do well in Thursday's council contests, last fought in 1996 with the end already in sight for the Major government. And nothing will mask the humiliation for Mr Blair of Dobbo's expected defeat in London. That said, the Labour split should have provided much more promising terrain for Tory Steve Norris. And the loss of the Romsey by-election would take some of the shine off net gains of some 400 council seats.

Moreover, the projected nationwide lead necessary for Tory recovery on that scale - at just 5 per cent - is but a third of that which analyst Peter Kellner says they would need to emerge as front runners in the general election stakes.

As he turns his attention once more to Northern Ireland, we may be sure that is one seismic shift the Prime Minister is not anticipating.

Mr Blair will be irritated by the late arrival of the mid-term blues. He won't like the headlines and criticism, much less defeat at the hands of Red Ken. He may bemoan an electorate which seems to harbour frighteningly high expectations of what can be done in so short a time. However, he can also content himself that Mr Livingstone will know all about that soon enough - and Mr Hague not yet awhile.