London, March 13 (Bloomberg) -- U.S. officials want Tony Blair to commit to war on Iraq. Labour Party legislators want him to rule it out unless he gets United Nations backing. That leaves the U.K. prime minister with a dilemma that threatens his career. U.S. Defense Secretary Donald Rumsfeld this week said the U.K. role in an invasion of Iraq is ``unclear'' and suggested America is prepared to go to war alone if needs be. Should U.S.-British efforts to gain UN Security Council support for a resolution authorizing an attack on Iraq fail, Blair must decide whether to go to war alongside the U.S., defying his own party. The alternative would mean cutting Britain adrift from its closest international ally. ``Blair already has pressure on him from his own party -- now he has more pressure on him from Donald Rumsfeld,'' said Robert Worcester, professor of politics at the London School of Economics and founding chairman of the MORI polling organization. ``Rumsfeld has momentarily put Tony Blair between the devil and the deep blue sea.'' Blair is facing a revolt in his party over his stance on Iraq. International Development Secretary Clare Short on Sunday said she may quit the cabinet. Almost a third of Labour's legislators last month defied Blair to support a parliamentary motion saying war isn't justified. Concern about a war with Iraq has contributed to a 17 percent fall this year in the benchmark FTSE 100 Index of U.K. shares. Yesterday the index dropped 4.8 percent to its lowest since June 29, 1995.
Leadership Challenge
Some Labour members are now discussing a challenge to Blair's leadership of the ruling party. ``We're saying to the prime minister that if you do go to war without the UN and without the Labour Party, you are not going to do it in our name,'' said John McDonnell, an anti-war Labour legislator whose message to Blair is: ``You should consider your position.'' McDonnell is backed by Labour veterans such as Tam Dalyell, the party's longest-serving member of parliament, former chancellor Denis Healy, and Mark Seddon, a member of the party's ruling National Executive Committee. A MORI poll last week found that only 31 percent of voters say they're happy with Blair's personal performance as prime minister, against 61 percent who said they're unhappy.
Voters Unconvinced
Two-thirds of people surveyed last weekend by Populus for the London-based Times newspaper said the British and U.S. governments haven't made a convincing case for war. Half said Britain should join the U.S. in military action against Iraq only if the UN authorizes it with a new resolution; a further quarter opposed British military involvement even if one were passed. Blair has led Labour since 1994, and never faced a challenge to his position. Now, analysts and investors are speculating his position may be vulnerable. William Hill Plc, Britain's second-largest betting chain, yesterday cut the odds for Blair standing down as Labour leader before the end of this year to 7-2 from 5-1, and tipped Chancellor of the Exchequer Gordon Brown as favorite to succeed him. Still, Labour rules mean opponents intent on toppling Blair would have to clear several hurdles. First they have to persuade the National Executive -- most of whose members owe allegiance to Blair -- to convene a special party conference, at which delegates would first vote on allowing a leadership contest. Blair's future would then be voted on by an electoral college that gives equal weight to the party's 270,000 grass-roots members, Labour's 411 lawmakers, and labor unions that help fund the party.
Loyal Opponents
Not all of Blair's opponents over Iraq want to replace him. ``I have little time for those who have already started talking about leadership challenges,'' said Chris Smith, a former minister in Blair's government who opposes him on Iraq, an issue he said is ``too important for such political games.'' Blair's allies yesterday tried to defuse the domestic pressure on him. Foreign Secretary Jack Straw yesterday met with Labour legislators to make the case for Blair. Foreign Office Minister Mike O'Brien afterwards said most legislators are behind Blair, and the party rebels have ``overplayed their hand.'' Still, even Blair's allies don't pretend that he doesn't have troubles. ``I'm not going to deny that it's been made more difficult'' by international and domestic pressure,'' said Tom Kelly, a spokesman for Blair.
Competing Pressures
Competing pressures on Blair may push him into seeking compromise at the United Nations, possibly trying to extend a proposed Monday deadline for Iraq to agree disarmament measures to avoid war. ``He faces pressure from his own party and his own country one way, and now from the U.S. in the other direction,'' said Dana Allin, head of transatlantic studies at the International Institute for Strategic Studies in London. ``He might be tempted by a compromise at the United Nations -- he's clearly in a very difficult position.'' Rumsfeld's suggestion that the U.S. may fight in Iraq without British troops helped the U.K. currency rise against the euro yesterday. ``In investors minds' it is now not 100 percent clear that the U.K. will go along with the U.S., even though Blair has reiterated his position,'' said Paul Mackel, a currency strategist at Dresdner Kleinwort Wasserstein. `` Until Rumsfeld's remarks there was no doubt and so it should help sterling.'' The prospect of the U.K. military supporting the U.S. in an attack on Iraq had helped the pound lose 3 percent against Europe's common currency in the past month and diminish its status as a so-called safe haven currency. The threat of war has boosted government bonds this year, pushing the yield on the 5 percent U.K. benchmark 10-year bond down 34 basis points. //www.quote.bloomberg.com