On 27 June 2007, Tony Blair stepped down as Britain’s prime minister and as an MP, and took up an appointment as Middle East envoy for the Quartet, a diplomatic group consisting of the United Nations, the European Union, the United States and Russia. Eight years on, it looks as though the US secretary of state, John Kerry, has pulled the plug on the mission – not a moment too soon.

For years, it’s been clear that Blair in the Middle East is at best a passenger and at worst a liability. The failure is a tragedy because although controversial among critics of Blair’s role in the Iraq war, his appointment didn’t have to play out the way it did. It looked at first like one of George W Bush’s better ideas. Who better to help bring peace to the Middle East than the man credited with achieving a settlement in Northern Ireland? Where would you find a better diplomatic big hitter to knock heads together? Bush drove the appointment – “the guy sacrificed his career for me” he is said to have told an aide.

And even though Russia agreed reluctantly, and the Palestinian Authority was not consulted, a determined effort by Blair would have brought them round quickly. Expectations were comfortingly low. No one expected him singlehandedly to bring peace to the region. Blair would have been forgiven a lot, in Britain, even in Palestine, if he had been seen to put his heart and soul into trying. But instead the Israelis have tolerated him because he has been so tame, and no other player has any time or respect for him.

How did it come to this?

The first reason is that his mandate has largely limited him to helping the Palestinian economy. His predecessor, James Wolfensohn, an Australian-born, former World Bank president, was limited by the same mandate, and that’s why he resigned. Wolfensohn shared the opinion of business people such as Lord (Clive) Hollick and informed journalists such as Le Monde’s Laurent Zecchini and Israeli affairs specialist Max Blumenthal: that progress in peace talks comes first, and only when they have delivered some sort of stability will private investment follow.

Palestinian negotiator Hanan Ashrawi told me: “Jim Wolfensohn resigned because he is a man of great principle and courage who did not want to be used. They had to find someone who would play the game, and Tony Blair accepted the role.”

Blair, in a private letter to Hillary Clinton in 2009, when she was US secretary of state, talked of using the role to achieve a “transformative change” agenda. But it turns out that transformative change was to be achieved by the project Blair worked hardest on in the Middle East: securing the Israeli release of electromagnetic frequencies for the commercial launch of the Palestinian mobile telephone operator, Wataniya.

Getting competition in the Palestinian mobile phone market may or may not have been key to transformation, but it indirectly benefits the bank JP Morgan, where Blair is a consultant and whose clients include investors in Wataniya.

The second reason for Blair’s failure is that he has simply not put in enough time and effort. He says he spends about a week a month in the region, but all of our sources – including diplomats and Middle East correspondents, who monitor his activities as closely as he will allow – tell us that this may be an over-generous estimate. They say that during his one week of every month, he arrives at his Jerusalem offices on Monday evening, and leaves on Thursday evening. Ashrawi told us: “He is very part-time. His presence is not intrusive. It does not feel like a week a month. He certainly doesn’t report to me once a month.”

They had to find someone who would play the game, and Tony Blair accepted the role Hanan Ashrawi, PA negotiator

While Blair is there, his engagements may be on Quartet business but at least some of them are with people who form the bedrock of his lucrative consultancy business, and there is no transparency about what is discussed.

And that brings us to the third problem: the conflict with his other interests. No one can be quite sure if the person attending meetings is there solely as the Quartet’s Middle East representative, or because he is also the patron and founder of the Tony Blair Faith Foundation, or the principal of Tony Blair Associates, or indeed all of these distinguished gentlemen.

Very early on in his tenure, Blair went to a meeting with the emir of Kuwait, allegedly on Quartet business. Yet he was accompanied not by anybody from the well-staffed Quartet office but by his former Downing Street chief of staff Jonathan Powell, then a consultant with Tony Blair Associates. If anything to do with Middle East peace came out of the meeting, no one knows what it was; the emir eventually gave Blair a £27m consultancy contract.

Wolfensohn told us: “For Tony Blair to say ‘I would like to talk to you about the peace process’ is a very different entry point from saying ‘I would like to get an oil concession in the east of your country for a client, or I would like to become an adviser to your country’.”

The fourth reason for Blair’s failure is that he has not made sufficient attempts to get the Palestinians on board. Where he has stepped outside the mandate, it has been one-sided, in praise of Israel. His outspoken attacks on Islam, and his periodic calls for more war in the Middle East, are perhaps acceptable from a former prime minister with an involvement in faith debates and no current public responsibilities, but not from the Middle East envoy.

The letter to Hillary Clinton also shows that Blair could have moved into the political realm if he had wanted to, because in private he makes disparaging comments about the Palestinian security apparatus. Yet he has chosen not to do the one thing that Wolfensohn believed could make his mission mean something. No wonder exasperated members of the Palestinian Authority have called him “useless, useless, useless”.

Blair has lasted this long as the Quartet’s envoy only because the Israelis could be sure he would never bring them unwelcome news, and because he symbolised a comforting untruth to which American negotiators cling: that private-sector investment in Palestine can be used as a path to a two-state solution. The Quartet should now look for someone who will make peace their top priority.