Under the leadership of Livingstone the GLC did introduce some important reforms, most notably the fares fair policy itself. Yet even then Livingstone revealed the inadequacies of his left-reformist approach. At each critical stage in the GLC's battle against the then Tory government Livingstone was unwilling and unable to mobilise a mass movement of workers in defence of the fares fair policy, against rate-capping (which strictly limited the GLC's income from property taxes), and against the eventual abolition of the GLC.

The contrast with Liverpool city council could not have been starker. Under the leadership of Militant supporters (now the Socialist Party), Liverpool council mobilised thousands of workers in demonstrations and strikes resulting in the winning of concessions worth up to £60 million from the government in 1984. The superiority of a Marxist leadership revealed itself concretely in the homes, nurseries and leisure centres built by the council and the jobs created in a city blighted by mass unemployment. Ironically, it was the capitulation of Livingstone over rate-capping which paved the way for the isolation of Liverpool council and its eventual defeat as it faced the combined onslaught of the Tory government, the judiciary and the right-wing labour and trade union leadership.

In falling over himself to heap praise on Blair, Livingstone incredibly claimed that Blair's government had the "potential to be a great reforming government on a par with those of 1906 and 1945". But the introduction of tuition fees, disability and single parent benefit cuts, the measly £3.60 minimum wage and the privatisation of health and education through PFI could hardly be described as great reforms.

But it is the reference to the 1906 Liberal government that is most significant. Blair has led the way internationally in changing the once traditional parties of the working class into openly capitalist parties. For Blair, the split in the political centre at the end of the last century, which resulted in organised labour turning away from liberalism with the formation of the Labour Party, was a mistake he intends to rectify. Does Livingstone also believe that the historical separation between the Liberal Party and the labour movement was a mistake? If not, then why cause confusion by the reference to 1906? Yet in March Livingstone was at it again, extolling the virtues of the 'Third Way' at an international local government conference in Barcelona.

It now looks likely that privatisation of the Tube lines will be delayed until at least after the mayoral election next year. New Labour's officialdom fear that, despite Livingstone's intentions following his 'third way' conversion, he could become a focal point of opposition on this and other issues, as Blair's government becomes increasingly unpopular in a period of recession and attacks against workers.

The big question is: what will Livingstone do if he is not shortlisted? Livingstone has warned of a legal challenge if barred, but at this stage, given scepticism concerning his loyalty, he has ruled out standing against New Labour. However, in an interview in The Guardian last year Livingstone hinted that he might stand against the official Labour candidate (14 November 1998). He calculates that he has less to lose than Blair with the threat of this ultimate weapon. This is a high risk strategy, however, which would not only result in his expulsion from the Labour Party, but would probably also fail to achieve his aim of becoming mayor, while losing his position as MP in the process.

If he campaigned on a socialist alternative to New Labour he could obtain a strong vote. But his attempts to reconcile with Tony Blair, added to his failure to organise the left after ten years in parliament, strongly indicates that he will not do so. New Labour certainly has a difficult 'Livingstone dilemma' to deal with. But Livingstone, because he refuses to break with Blair's openly capitalist party, has a bigger 'Labour dilemma' to confront.