The announcement by Paddy Ashdown that he will stand down as leader of the Liberal Democrats after the European election in June is a blow to Prime Minister Tony Blair's plans for closer ties with Britain's third biggest party.

Ashdown has been the party head for 11 years, almost since it was formed out of the old Liberal Party and the Social Democratic Party, a right-wing breakaway from the Labour Party in the 1980s. He told the Lib Dems' 45 MPs that he had taken the decision before the last election for personal reasons. "I don't want to be an MP at 65. Sorry, but I don't want to do it," he explained. Emphasising once again his close working relationship with Blair, he added that the Prime Minister had known of his intention to stand down since their first meeting after the 1997 general election and that he had informed him of his decision to quit even prior to telling his own MPs.

Nevertheless, the decision was precipitated by growing opposition to Lib-Lab ties within both parties, which Blair and Ashdown have sought to steamroller through. Both denied any threat to inter-party collaboration. Blair said the public did not want to see political parties "stuck in rigid tribal boundaries". Ashdown said that, "The chances of anybody standing who will succeed who goes against what has been the established democratic will of the party, I don't think is terribly good."

This is mainly hot air. The grassroots of the Lib Dems are in the main opposed to working so closely with the party they compete with directly in many local government bodies and constituencies. As late as January Ashdown said he doubted that opponents of working with Blair would force a leadership contest and he would not consider standing down until after the next general election. But Ashdown was under fire and faced a bitter attack over Lib-Lab relations at party conference in Harrogate in September. The timing of Ashdown's announcement was an attempt to avoid a leadership battle before local government, Scottish, Welsh and European elections in May and June. But the contest for succession is already shaping up and will largely hinge on whether or not to continue with the so-called "constructive opposition" with Labour.

Within an hour of Ashdown's announcement, Nick Harvey confirmed he would stand. Harvey is Ashdown's protégé and supports his initiative. But the other two frontrunners, Charles Kennedy and Simon Hughes, are decidedly cool towards ties with the Labour government, and Hughes publicly fell out with Ashdown on the issue in November last year.

Even prior to the 1997 General Election, Blair declared his intention of ending the "historic rift" on the left between Liberalism and Social Democracy. This referred to the formation of the Labour Party out of a split with the Liberals by the trade unions in 1906. He saw this as a way of helping shift the Labour Party to the right, eliminating any threat from the Conservatives and thus securing an unchallenged position in government. Ideologically, this was bound up with an attempt to end the class basis of British politics in which Labour has relied on a working class constituency.

In return for Lib Dem co-operation, and as a means of combating the pro-Tory weight of Britain's first-past-the-post election system (which gave the Tories far more seats than their overall vote would indicate), Blair pledged to introduce Proportional Representation.

Ironically, Blair's own difficulties began initially as a result of the massive 198-seat majority he won by capturing so many Tory marginals. Enthusiasm for collaboration with the Liberals faded in the party, as they became Labour's main opponents in local government. Equally, electoral change went out of favour since Labour was the main beneficiary of the anomalies of the present system.

The Independent newspaper correctly identifies this as the main source of Ashdown's own failure. They write, "He wanted a realignment of British politics--but it was a realignment that seemed superfluous to an electorate already realigned behind Tony Blair.... After the Labour landslide removed his bargaining power, his strategy for obtaining proportional representation was fatally flawed."

Blair and Ashdown still managed to go a long way in establishing direct working relations with their respective parties, to the point of Ashdown and other Liberal Democrats being included in Cabinet Committees. Drawing up proposals for electoral reform was handed over to former Labour/SDP defector Lord (Roy) Jenkins of Hillhead, who is considered as a mentor by Blair. He recommended a watered-down form of PR called the "alternative vote plus". But though Blair said the Jenkins report made "a well-argued and powerful case", it would have lost 100 Labour MPs their seats under present voting patterns and only served to crystallise opposition within Labour's ranks.

This issue has played a large part in shaping the infighting that has wracked the Labour government over the past few months, which culminated in the forced resignation of Blair's right-hand man Peter Mandelson, one of the main advocates of Labour-Lib Dem collaboration and electoral reform. But the issue cuts across these recent divisions, with opponents including Labour front benchers John Prescott, the deputy prime minister; Gordon Brown, the chancellor; and Jack Straw, the home secretary. Senior ministers described Blair as in a minority in his own cabinet.

Faced with such widespread opposition, Blair was forced put off a decision on electoral reform until autumn 2000, further reducing the prospect of a referendum before the next election that is due in 2001. It is this that seems to have convinced Ashdown to get out while the going is good. This is certainly a measure of Ashdown's own failure, but it also serves to underline that Blair's New Labour project is bereft of any real substance.