TONY BLAIR'S oldest political ally said last night that the Prime Minister is likely to stand down as MP for Sedgefield at the next General Election.

Mr Blair has already said he plans to stand down as Premier at the end of his third term and will not fight the next election - expected in 2009 or 2010 - as Labour leader.

John Burton, Mr Blair's agent, who helped him win the nomination for the County Durham seat in 1983, said: "Tony's said he is packing in as leader and he's not going to stay on the backbenches - so I can't see him standing at the next election.

"He has spoken to me about it, and as far as I know he is not going to stand."

Speculation has been mounting at Westminster about Mr Blair's future. After May's General Election, when Mr Blair's Commons majority was cut by 100 to 66, it was felt that he was a "lame duck" Prime Minister who would hand over to his successor - presumed to be Chancellor Gordon Brown - sooner rather than later.

However, mainly due to his composed handling of the terrorism crisis, Mr Blair's political fortunes have enjoyed an improvement, and there has been talk of him contesting a fourth General Election.

The subject was raised at yesterday's lobby briefing at Westminster, where the official Downing Street line was that Mr Blair had yet to turn his mind to the question of whether he should continue as an MP after leaving Number 10.

Whether to remain as an MP is always a sensitive issue for former prime ministers. John Major stayed on for four years once Mr Blair had defeated him in 1997, but he made a point of not overshadowing William Hague, his successor as Tory leader.

Margaret Thatcher left Parliament at the next election after being ousted by her party in 1990.

But her predecessor as Tory leader, Edward Heath, remained in the House for a mammoth 26 years after she replaced him in 1975.

Mr Blair would appear to favour a clean break from domestic politics. He will be relatively young - 57 - in 2010, and there are suggestions that he will go on to be a leader on a European stage or of an international body, such as the United Nations.

Whatever he chooses, his future seems lucrative. Last year, Mr Hague, the MP for Richmond, North Yorkshire, was the highest earner in the Commons, netting just under £1m from his lectures and book.

Mr Blair is in a bigger league. He is very popular in the US, where former president Bill Clinton received an advance of more than £5m for his memoirs.

"Tony has kept a diary throughout," said Mr Burton. "I would be extremely interested to read his book."