Global Policy Forum

By Colin Brown and Rupert Cornwell

George Bush and Tony Blair were looking more isolated than ever last night as the ground shifted further under their strategy of remaining in Iraq "until the job is done". The President and the Prime Minister were left clinging to the dream of establishing a lasting democracy in Iraq as their advisers urged them to look for a new, more realistic, exit strategy.

A leaked report by the Iraq Study Group, chaired by former US secretary of state James Baker, a close friend of the Bush family, paved the way for a large-scale withdrawal of US forces and a dramatic shift of US policy. It suggested that instead of the "stay the course" policy, President Bush could extricate the US from the quagmire of Iraq by removing US forces to bases outside Iraq. In an even more spectacular U-turn, they are believed to suggest that Iran and Syria could be invited to co-operate in the stabilisation of lawless Iraq.

That was implicitly rejected by the White House spokesman Tony Snow, who said the administration would not "subcontract" management of the war to outside advisers. But two high-profile Republican senators separately called for a change of course. "We clearly need a new strategy," said Chuck Hagel of Nebraska, a possible 2008 presidential candidate. John Warner, chairman of the Senate Armed Services Committee, said Iraq was "drifting sideways" and that if there was no improvement within two or three months, then policy would have to change.

That deadline coincides with the expected publication of the conclusions of Mr Baker's Iraq Study Group around the end of the year. Support for the war is at its lowest ebb and top Republicans warned that the present state of affairs could not continue. With the carnage on the ground mounting daily, and American military losses approaching 2,800, a new CNN poll found 64 per cent of the public believing the war was a mistake - more than at any time since the invasion in March 2003.

Mr Bush's approval rating is close to all-time lows, three weeks before mid-term elections at which the Republicans face the loss of one or both Houses of Congress. Senior Labour figures in Britain are hoping a shift of opinion in the highest reaches of the US administration could signal a turning point to force Mr Blair to revise his own approach to Iraq where Allied forces have failed to establish the rule of law, in spite of the promises that followed the overthrow of Saddam Hussein.

Last week, Mr Blair was urged by the chief of Britain's armed forces, General Sir Richard Dannatt to scale down his ambitions for Iraq. Warning that the Army could be broken if it was forced to stay in the country, Sir Richard said: "The original intention was that we put in place a liberal democracy that was an exemplar for the region, was pro-West and might have a beneficial effect on the balance within the Middle East... I think we should aim for a lower ambition."

Sir Richard said the presence of British troops in Iraq was exacerbating the security situation. On Monday night, the Home Secretary, John Reid also broke ranks by admitting for the first time at a private meeting of the Parliamentary Labour Party that foreign policy was contributing to the radicalisation of young Muslims in Britain.

Yesterday, at his first Downing Street press conference since he announced that he will be gone within a year, Mr Blair resisted the calls for a change of strategy. He appeared to contradict Mr Reid, describing such arguments as absurd. "You can't end up in a situation where you say, when we are on the side of ordinary, decent Muslims in Iraq or Afghanistan who want their own democratic government, when we are there at the behest of those governments with a full UN resolution, that we, when we are protecting those against people who are driving car bombs into markets and mosques and so on, that we somehow are causing their extremism. It's absurd and you won't defeat this extremism until you take that argument head on. And the real problem we've got is it has got to be taken head on in the Muslim community as well."

Politicians on both sides of the Atlantic believe there is an endgame being played out for Mr Blair and Mr Bush and a policy shift is growing nearer. Labour MPs said privately last night that Mr Blair may be the last one standing by the President. Meanwhile, his most likely replacement - Gordon Brown - who admitted last month that mistakes had been made in Iraq, is left watching anxiously as more soldiers' lives are lost in Iraq.

How the big wheels in the Bush administration have turned full circle

The CIA Man

"Iraq is now what Afghanistan was in the late-1970s and throughout the 80s into the 90s, and that's an insurgent magnet, if you will, a mujahedin magnet, only much, much worse."

Michael Scheuer, Former Head of the CIA's Bin Laden Unit

The Neo-Con

"The US objective in Iraq has failed... Our mission has failed because Iraqi animosities have proved uncontainable by an invading army of 130,000. And the administration has, now, to cope with failure."

William Buckley, Conservative Editor of The National Review

The General

"The commitment of our forces to this fight was done with a casualness and swagger that are the special province of those who have never had to execute these missions - or bury the results."

Retired Marine Lt Gen Gregory Newbold

The Administration Man

"We didn't have enough troops on the ground. We didn't impose our will. And as a result, an insurgency got started and... got out of control."

Colin Powell, Former Joint Chief of Staff and US Secretary of State

The Adviser

"There'll probably be some things in our report that the administration might not like... I personally believe in talking to your enemies. Neither the Syrians nor the Iranians want a chaotic Iraq."

James Baker, Former US Secretary of State