Tony Blair announced on Thursday he would step down on June 27 after a decade as prime minister, and told Britons disillusioned by the war in Iraq that he had always done what he believed was right.
Blair's popularity has suffered since he sent British forces to join the 2003 U.S.-led invasion of Iraq. A Labour Party rebellion in September forced him to say he would quit within a year, opening the way for Gordon Brown to take over.
"Hand on heart, I did what I thought was right," Blair told Labour Party members in his constituency in northern England. "I may have been wrong, that's your call. But believe one thing, if nothing else: I did what I thought was right for our country."
U.S. President George W. Bush, who developed a remarkably close relationship with Blair, said the prime minister was a long-term thinker and a man who kept his word. "When Tony Blair tells you something, as we say in Texas, you can take it to the bank. We've got a relationship such that we can have really good discussions -- so I'll miss him, he's a remarkable person and I consider him a good friend," he said.
Blair's resignation triggers a contest to lead the Labour Party that finance minister Brown is favorite to win. Labour said its new leader and deputy would be announced on June 24.
The new party leader would become prime minister after the departure of Blair, the only person in a century besides Margaret Thatcher to have held the post for 10 years.
"I think that's long enough, not only for me, but also for the country, and sometimes the only way you conquer the pull of power is to set it down," Blair said.
Northern Ireland Peace
Blair will be remembered for helping bring peace to Northern Ireland after decades of violence, winning three straight elections for Labour for the first time, and dragging it away from its left-wing roots to the center of British politics.
"There is no doubt ... that the prime minister's concerted efforts helped in ultimately securing devolution in Northern Ireland," said Protestant cleric Ian Paisley, who long resisted the power-sharing government launched this week.
An opinion poll published by the Guardian newspaper on Thursday showed 60% of voters believed Blair would be remembered as a force for change, though not always good. The ICM poll said 44% believed he had been good for Britain.
"I came into office with high hopes for Britain's future and you know I leave it with even higher hopes for Britain's future," he said. "This is a country that can today be excited by the opportunities, not constantly fretful of the dangers."
Blair had long been expected to hand over power to let another Labour leader guide the party into the next national election -- due in May 2010 at the latest.
Brown, whose official residence is next door to Blair's in London's Downing Street, has waited with increasing impatience for his neighbor to leave. Critics say their rivalry, often bitter, has diluted the government's effectiveness.
But Brown paid tribute to Blair on Thursday, calling his achievements "unique, unprecedented and enduring".
Blair has been tainted by a party funding corruption scandal in which he became the first serving prime minister to be quizzed by police, as a witness, in a criminal investigation.
Blair and Brown were the twin architects of Labour's rise to power in 1997 after 18 years in the political wilderness.
Under Blair, Britain's economy has enjoyed an era of growth, high employment and low interest rates. But interest rates hit a six-year high on Thursday, and are set to rise again.
Brown's chief challenge will be to revive support for Labour and overtake the opposition Conservatives in the opinion polls.
Conservative leader David Cameron, 40, has revitalized the party of Margaret Thatcher -- the only prime minister in the past century to hold power longer than Blair -- since he became leader in 2005. Polls suggest he could win a slim majority in parliament in a national election.
Cameron said the Blair decade had been "10 years of dashed hopes and big disappointments, of so much promise and so little delivery".