Last week was bad for the Labour Government. The party sustained heavy losses in the local elections, and there was a big vote in London for Ken Livingstone, who ran against Labour as an independent. But Tony Blair has always been a realist. The Guardian?s political commentator expects the Prime Minister to hold his course. FOR 30 months, half his allotted span, Tony Blair seemed just about impregnable. The favourite metaphor, with its Messiah-like overtones, presented him as walking on water. There was nothing, apparently, that he could not achieve, including certain victory at the next general election. Of all European leaders, he was the strongest, holding a massive majority in a parliamentary system which is noted for its party discipline. His peer-group on the Continent regarded him with awe, for having been so much more successful than any of them at the business they are all engaged in: deploying democratic votes for the attainment of political objectives that do not need to be negotiated after an election is over. From this base, he undertook some bold adventures, especially in the field of constitutional reform, and set about the process of long-term social renewal, especially via the reform of education.

But the second half of his term, coinciding with the change of millennium, opened badly. The calamities began, as in my opinion they deserved to, with the Dome at Greenwich. This millennial symbol was the symbol also of all that is most immature about New Labour: its absurd grandiloquence, its devotion to image before substance, its infatuation with corporate sponsorship, its failure of nerve when presented with a Tory decision ? for the Dome was a Tory invention ? that cried out to be revoked. The Dome, at ?750 million, has been a monumental waste of quasi-public resources. So there is a sort of justice in dating from 1 January this year Mr Blair?s arrival on dry land, if not the rocks. He is human after all. He makes big mistakes. He experiences the disillusionment, if not contempt, which modern voters soon visit on their leaders, however heavily they may once have voted for them. And now his own image of riding serenely through these problems has been smashed by the arrival alongside him as Mayor of London, from out of the party he thought he owned, of a politician he detests.

Ken Livingstone?s election as mayor was not the worst thing possible. If he had not left the Labour Party, and had instead been the official Labour candidate, the damage to Blairism would have been cataclysmic. If, having left, he had taken scores of Labour politicians with him, that would have been very bad as well: but it did not happen. A Tory as mayor would also have been more dangerous than the independent Livingstone. But for a Prime Minister who floated so high, these are small consolations. Creditably, he was determined to revive local politics, and thought that elected mayors ? a deep systemic challenge to the parliamentary system ? were the way to do it. He still does. But the first such exercise has given birth to a political rival with nearly 800,000 personal votes behind him, as well as the chutzpah to extract every drop of personal advantage he can at Blair?s expense.

This is unsettling at several levels. It destroys the impression of omnipotence in both the party and the country. It exposes the Labour political machine as less than the perfectly oiled juggernaut that took the 1997 election. It is the prelude to endless political argument, which will be seen as essentially a Labour argument even though Livingstone is no longer Labour.

Blair got where he is today by winning so many arguments that most critics were deterred from having any more. Omnipotence enforced an impression of unity. Though the mayor has few powers, and very little independent money, he will prove a master at the blame-game when Londoners continue to rail against the shocking state of public transport, the biggest local issue. A political system which puts inordinate stress on control, unity, and winner-take-all victories will be subject to more division and disorder. The national political conversation, having just begun to get used to the collapse of old categories of right and left, must now learn to accommodate the fragmentation of power itself. A German would be entirely used to this. Even France, though famously centralised, understands the divisions of power. For the Brits, an earthquake that began in Scotland rides disturbingly up the Thames.

Many Labour people are finding this hard to take. I have heard some Cabinet ministers talking about it as the end of life as they have comfortably known it, and worrying about the prophetic message it is sending for the general election next year. Something big is happening not only to the omnipotence of Blairism but the stability of the party-based political system. It frightens the pants off party campaigners.

On Blair, I believe, the effect will be different, mainly because he never had illusions of his own immortality. It will simply confirm what he has always thought, that nothing in politics can be taken for granted. He does not always give that impression. He likes the power his 1997 mandate gave him, and is the most presidential type of Prime Minister that modern Britain has seen. He does little to contest the media story that he controls everything that moves, and never ducks accountability for any aspect of policy ? which is partly why Livingstone?s triumph seems such a personal defeat. But these outward signs of domination coexist with an inner sense of insecurity that recognises the fickleness of politics. A senior minister who, pre-Livingstone, was telling me how sure he was of a second huge Labour majority also said that, if Blair heard him saying such a thing, he would be fired tomorrow.

The strongest element of Blair?s political make-up has always been his attachment to reality. He is a supreme political strategist. He showed that from the moment he became party leader in 1994, determined to re-make Labour into a party of government. The intermittent conversations I have had with him since May 1997 have always shown me that power has done nothing to reduce the primacy of this faculty. Though much interested in policy, especially on education and welfare and now increasingly on health, and seriously engaged by the long crises in Ireland and Europe, he never takes his eye off the politics, both large and small, of every issue that might make people vote the way they do: the trait that drives his worst habit, of sucking up to the bullies who run the Sun and its xenophobic readers.

Mayor Livingstone presents a new piece of reality. Regrettable, but there it is. A reminder, along with more widespread Labour losses in local elections, of how unreliable most voters are these days. But not the end of the world, especially in the context of the Conservative Party?s astounding failure, in a climate of apparent anti-Blairism, to hold Romsey, one of its safest parliamentary seats. The god-like hero of 1997 is brought to earth. But in his own mind he never left it, and always knew its bear-traps.