Labour faces 'big fight with SNP'

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He warned that a victory for the Scottish National Party at Holyrood, and the subsequent referendum on independence, would plunge the economy north of the border into uncertainty.

The Prime Minister joined forces with Chancellor Gordon Brown to halt the SNP advance after numerous polls placed the Nationalists well ahead of Labour in the battle for votes.

Speaking on BBC Radio Scotland ahead of a campaign event with the Chancellor and First Minister Jack McConnell in Glasgow, Mr Blair said Scotland was much better off within the UK.

Asked if Labour could turn around five months of negative polls in the five remaining weeks to polling day, he replied: "I think there's every chance but I mean you're right there's a big fight and that's what politics is about.

"And one of the things I want to emphasise is actually how strong Scotland is today. Scotland has now got an average employment rate of lower than the UK average. Well I can't remember the last time that happened. It's got 200,000 extra jobs, we've got a huge financial services sector."

The most recent poll, based on a TNS System Three poll for STV, suggested the SNP would win 51 seats to Labour's 44, the Lib Dems winning 16, the Tories' 13, the Greens' four and the Scottish Socialist Party gaining one seat.

But Mr Blair warned: "The important thing is this: the moment you've got the SNP government in charge and you've got that referendum over the next few years then you inject uncertainty and instability into the situation.

"And then of course the people in the driving seat taking the train down the track are the SNP, who of course, will want to win that referendum and make sure that they can have separation.

"So I think when you look at these economic questions and you look at the effect on industry and living standards, the question is: is Scotland stronger today economically? Answer yes, so why put it at risk?"