Tony Blair today announced he will resign as Prime Minister on June 27.

He declared his decision to an emotional meeting in his constituency, saying: "Today I announce my decision to stand down from the leadership of the Labour Party.

"The party will now select a new leader.

"On the 27th of June I will tender my resignation from the office of Prime Minister to the Queen."

He was speaking to a packed meeting at Trimdon Labour Club and told his supporters: "I have been Prime Minister of this country for just over 10 years.

"In this job, in the world today, I think that is long enough for me, but more especially for the country.

"Sometimes the only way you conquer the pull of power is to set it down."

He defended his record, including Iraq, but said others would make the final judgment.

And in an emotional moment, he said: "Hand on heart, I did what I thought was right."

Deputy Prime Minister John Prescott today also announced formally that he was standing down.

The Prime Minister, MP for Sedgefield since May 1983, told the audience: "There are obviously judgments to be made on my premiership and in the end that is for you, the people, to make."

Mr Blair began his long-awaited speech with tributes to his long-standing agent, John Burton, and his wife, Cherie.

Then he said: "I have come back here to Sedgefield, to my constituency, where my political journey began and where it's fitting that it should end."

Mr Blair conceded that expectations of his new administration in 1997 had been "too high" - but set out what he said was an unbeatable post-War record.

"1997 was a moment for a new beginning - the sweeping away of all the detritus of the past," he said.

"And expectations were so high, too high probably, too high in a way for either of us.

"And now, in 2007, you can easily point to the challenges or the things that are wrong or the grievances that fester."

But to massive applause, he boasted: "There is only one Government since 1945 that can say all of the following: more jobs, fewer unemployed, better health and education results, lower crime, and economic growth in every quarter.

"Only one Government - this one."

He insisted: "Britain is not a follower today, Britain is a leader. It gets the essential characteristic of today's world - it is interdependent.

"It is a country comfortable in the 21st century, at home in its own skin, able not just to be proud of its past but also confident in its future.

"I don't think Northern Ireland would have changed unless Britain had changed."

He tackled the thorny issue of Iraq by saying that removing Saddam from power in Iraq and the Taliban in Afghanistan had been done with "relative ease", but the "blowback" from "global terrorists" had been substantial.

"For me, I think we must see it through," he said.

"The terrorists who threaten us here and around the world will never give up if we give up.

"It is a test of will and belief and we can't fail it."

His remarks were heard in silence.

Mr Blair - who made no reference to Gordon Brown in his address - spoke of the lessons he had learned as Labour leader for 13 years and Prime Minister for 10.

"What I had to learn as Prime Minister was what putting the country first really meant.

"In time you realise that putting the country first does not mean doing the right thing according to conventional wisdom or the prevailing consensus, or the latest snapshot of opinion.

"It means doing what you genuinely believe to be right."