TRIMDON, England - Tony Blair said Thursday he would step down as prime minister on June 27, closing a decade of power in which he fostered peace in Northern Ireland and followed the United States to a war in Iraq that cost him much of his popularity.

Britain's Prime Minister Tony Blair speaks at Trimdon Labour Club in his Sedgefield constituency in northern England, Thursday May 10, 2007. [AP]

In a somber farewell, Blair made way for Treasury chief Gordon Brown to take the top post. The British leader looked overcome with emotion, struggling to retain his trademark broad grin as loud cheers rang out.

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"Hand on heart, I did what I thought was right," Blair told party workers and supporters at Trimdon Labour Club in his Sedgefield constituency in northern England. "I may have been wrong, but that's your call. But believe one thing if nothing else. I did what I thought was right for our country."

Following the Sept. 11, 2001, terrorist attacks in the United States, it was right, Blair said, to "stand shoulder to shoulder with our oldest ally, and I did so out of belief."

Brown, Blair's dour partner in reforming the Labour Party and a sometimes impatient rival in government, was expected to easily win election as the party's new leader and become the next prime minister. Brown has never criticized Blair's decision to go to war in Iraq and has given no indication on how he will steer Britain's role in the conflict.

Blair, 54, has stopped just short of openly endorsing Brown, a stern Scot who lacks his charisma and common touch.

The two men stuck together during the 2005 election campaign, at one point famously facing the cameras and eating ice cream. The camaraderie sometimes seemed forced, though they rarely disagreed in public on the issues.

On one occasion as he sat beside Blair during that campaign, Brown was asked whether he would have done the same as the prime minister over Iraq. There was a long pause before Brown said: "Yes."

The government has declared its hopes of withdrawing from front-line operations this year - a move certain to please a public anxious to see an end to the conflict.

In London, Laura Phillips, 21, a banker, reflected the anti-war mood.

"I'll fight for him if he gets our troops out of Iraq," she said.

Blair embraced dozens of local Labour activists as he arrived to greet around 250 supporters packed into the former mining village's Labour clubhouse. Some chanted "four more years," but were chided by the leader as he began his speech.

"That's not on message for today," Blair joked.

For his long-expected announcement, Blair returned to the district where he won election to Parliament in 1983, and where he announced in 1994 that he was a candidate for Labour Party leader.

Blair's announcement came days after he celebrated the 10th anniversary of Labour's landslide election victory of May 1, 1997.

Since then, he has been one of the most praised, and reviled, leaders in British history - the man who transformed the Labour Party, helped end Northern Ireland's troubles but angered many of his supporters by committing Britain to a bloody, unpopular war in Iraq.

When he was elected at 43 in 1997, Blair was the youngest prime minister of the 20th century - the first born after World War II and the only one to have played in a college rock band, Ugly Rumours. He transformed Labour from an old-style social-democratic party to centrist "New Labour" and led it to three consecutive election victories.

Under the stewardship of Blair and Brown, the British economy has thrived. London rivals New York as the world's pre-eminent financial center, GDP is up, unemployment is down and interest rates are low, though rising. However, Blair's promised health and education reforms remain incomplete, and soaring house prices and increasing personal debt threaten to widen the divide between haves and have-nots.

Nonetheless, his supporters say Blair will be remembered for helping the poor.

"It's a nostalgic day but we're here to celebrate of all of Tony Blair's achievements, he's done so much to help the people of this country, and so much to lift people out of poverty," said Maureen Lenehan, an official at the Trimdon Labour Club.

Blair announced his departure date two days after the formation of Northern Ireland's full power-sharing administration, a goal he spent much of his premiership striving to achieve.

But despite his accomplishments, Blair's legacy looks to be dominated by Iraq.

His decision to stand should-to-shoulder with President Bush by committing troops for the invasion divided his party and the country. Blair said he was content for history to judge him, but four years on and with almost 150 British troops dead in Iraq, the war is more unpopular than ever.

Bush lauded Blair and expressed confidence that Brown would support the war in Iraq.

"I believe that Gordon Brown understands the consequences of failure," Bush told reporters, adding that in discussions with Brown, he found him "to be easy to talk to, a good thinker."

He praised Blair as "a political figure who is capable of thinking over the horizon. He is a long-term thinker."

"I have found him to be a man who kept his word, which sometimes is rare in the political circles I run in," Bush said. "When Tony Blair tells you something as we say in Texas, you can take it to the bank."

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