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Labour may have to join forces with the Lib Dems to win power, Tony Blair declared today.

The former Prime Minister said the party must correct a "defect from our birth" and "reunite" the long-split traditions of the old Liberal Party and the Labour Party.

Mr Blair even didn't rule out a full-blown formal alliance with the Lib Dems - saying: “How this is done institutionally, that’s a matter for debate." Asked directly he said: "I literally don't know at this stage. It could go in a number of different directions."

He warned simply ditching Jeremy Corbyn's left-wing agenda wouldn't be enough to win power - and said today's Lib Dems must "aspire to govern" and show "clarity of purpose".

The ex-PM spoke on the 120th anniversary of the Labour Party as he claimed Brexit could have been stopped - if only there had been "serious opposition".

But he admitted there was no going back on Brexit now. Asked if Labour should campaign to rejoin the EU he said: "No, you just can't I'm afraid. Long term, who knows."

(Image: PA)

The Lib Dems spent five years in Coalition with the Tories. But as the party elects a new leader this summer it is set to be gripped by a key debate on where to stand politically.

Some in the party want to hold the centrist line on economic policy. Others want to take the Lib Dems back to the more centre-left traditions it held in the early 2000s, when the party was a voice against the Iraq War.

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In a key intervention in the party's leadership race, Mr Blair said Labour has an “extraordinary attachment” to retreating to “a narrow part of the left” - instead of aiming for the centre ground where he stood.

“If Labour becomes more moderate and less extreme, of course it will do better,” the former PM said.

“But not much. The problem is that we have defined radical politics by a policy agenda which is hopelessly out of date, with ‘moderate’ politics being just a milder version of it."

(Image: SOPA Images/LightRocket via Getty Images)

Outlining a string of ways to win power, he said: "First, we must build a new progressive coalition, to put Labour values into practice.

“We must correct the defect from our birth that separated the liberal reforming traditions of Lloyd George, Beveridge and Keynes from the Labour ones of Hardy, Attlee [and] Bevan.

“These traditions became separated by ideas around class, industrial organisation, the role of the state and individual liberty - all of which ideas are time bound.

“But they had in common social reform, advancement of opportunity, passionate commitment to fighting poverty and injustice, all of which are timeless.

“How this is done institutionally, that’s a matter for debate.

“But intellectually and philosophically, it is absolutely essential these two traditions are reunited.

“With one qualification - those liberal politicians that I mentioned aspired to govern. Today’s Lib Dems would have to show the same clarity of purpose.

“And remember there are many progressives who presently do not feel at home in either political party or indeed in any political party.”