After 10 years, Blair hands over to Brown

Ending a decade of relentless controversy, wars and even a police inquiry, Labour's longestserving Prime Minister was set to stroll out of No 10 with his head held high.

Crowds of well-wishers, and protesters were gathering in Whitehall to watch, cheer or jeer his final progress from Downing Street to the Commons for his final Prime Minister's Questions.

Then Mr Blair was returning to No 10 to give an emotional speech of farewell and thanks to his staff and closest aides and, shortly after 1pm, was to drive to Buckingham Palace with Cherie to offer his resignation to the Queen.

He will quit as an MP for Sedgefield tonight, citing a new post as Middle East envoy as the reason, although his international role is expected to allow time for him to write his memoirs for around £5 million and join the lucrative US lecture circuit.

Mr Blair's early departure will mean an electrifying double-by-election, probably as early as 19 July in Sedgefield and Ealing Southall, the London seat vacated by the death of Piara Khabra.

It will be the first electoral test of the new political rivalry that will dominate Britain until the next election - Mr Brown versus David Cameron.

Mr Brown was up late into the night with his closest friends and advisers planning the launch of his new administration. He is expected to start with a bang - a sweeping reshuffle in which a businessman from outside politics will join the Government to symbolise his commitment to opening up Whitehall to "all the talents".

Up to seven Cabinet members will leave their jobs. Alistair Darling will replace Mr Brown as Chancellor, with Jack Straw tipped to be either Minister for Justice or Foreign Secretary.

In an olive branch to Blairites, John Hutton, the Work and Pensions Secretary once alleged to have said Mr Brown would be a "f*****g disastrous prime minister" is tipped to survive, and may replace Patricia Hewitt as Health Secretary.

Whitehall will be reorganised, with the old Department of Trade at the centre of reforms designed to promote competition, energy efficiency and major construction projects.

Mr Brown plans to echo his earliest political coup of making the Bank of England independent by giving more freedom to bodies that promote business policy and technology.

A YouGov poll for Sky News put the Conservatives on 37 per cent to Labour's 36. It vindicated Mr Brown's decision to emphasise change, with some 45 per cent of those polled saying that being "heir to Blair" was a "bad thing".

Mr Blair is the first prime minister to leave without being forced out by voters, their own party or illness in modern times. John Major, Margaret Thatcher and Sir Edward Heath were driven out while Harold Wilson retired due to ill- health.

An aide said Mr Blair was "having a very ordinary Wednesday morning, seeing people from 8am and then spending the morning prepping for Prime Minister's Questions. It will probably get a lot more emotional after that is over".

Labour Party chairwoman Hazel Blears said it was a "bitter-sweet day".