In blue suit, crisp white shirt, the hair – matching his tie – a little greyer now, the right arm outstretched to make sure he understands exactly where the old road crossed the border, the former Prime Minister of the United Kingdom is standing on the edge of a bleak tract of waste land in south-western Qalqilya. It is overlooked by the forbidding eight-metre slabs of concrete wall, a few defiantly decorated with murals of the black, green, white and red Palestinian flag, that unbreachably divides the town from Israel. Beside him, Qalqilya's Fatah governor Rabeeh Khandaqji is explaining how the road we are on – now, thanks to the barrier, a dead end – was once among the busiest in the West Bank, connecting the town to the Israeli workplaces of almost 80 per cent of its labour force. The international community's Middle East envoy tells the Governor he noticed the boarded-up shops as his convoy made its way towards the wall, and listens carefully as he is told they are among 450 businesses which have closed in his town in the past decade. "We hope Mr Blair is going to help us in Qalqilya," Mr Khandaqji explains, "in the same way that he has helped Nablus and Jenin."

The Governor's remark is made to a mere handful of mainly local Palestinian journalists covering the envoy's visit, underlining how far Blair has been from the international spotlight in recent months. That is almost certainly about to change. For if the Irish public vote "yes" in their second referendum on the Lisbon EU Treaty on 2 October then the debate will start in earnest about who can best fill the big brand-new job of full-time EU president the treaty will create. The Irish referendum is not the only hurdle left for the Treaty to clear since the fiercely-eurosceptic Czech President Václav Klaus is still trying to delay his country's ratification. But an Irish vote in favour of Lisbon will be enough to trigger a wave of speculation on who will emerge in what could be the role of "Mr Europe" over the next five years. And without even uttering a word to say he wants the job, Mr Blair is already being discussed in Brussels and across the capitals of the 27 member states as the biggest figure among the potential candidates. If all goes to plan, a decision could be taken at next month's EU summit. It's just possible that, however disappointingly for Mr Khandaqji, Blair will no longer be available, at least in his present post, to try and secure Qalqilya the better economic deal it badly needs.

The words the Governor uses to underline the importance he clearly attaches to the envoy's visit are nevertheless instructive. For the first time since Blair was appointed the international Quartet's representative in June 2007, West Bank Palestinians are beginning to see some change – albeit severely limited – for the better; checkpoints have been eased round Nablus and between it and Jenin. Nowhere is cause and effect cloudier than in the Middle East, and Blair is careful to tell the reporters in Qalqilya today that a major reason for the easing of conditions is that "the Obama administration has been fully behind it", many critics argue that Benjamin Netanyahu's government is doing this as a substitute for rather than a complement to the real political progress that diplomats – including Mr Blair – repeatedly point out is essential for a lasting improvement to day to day life for Palestinians.

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That said, the World Bank has cautiously projected 5 per cent growth in the West Bank this year and acknowledged that Israel has taken "significant steps" to ease movement of Palestinians within parts of the west Bank, and of Israeli Arabs into the cities. All those steps have been long urged by Blair.

Blair isn't boasting about that in Qalqilya. One virtue of liberation from modern electoral politics is that you don't, simply to survive, have to trumpet every achievement, however modest. And he also knows that there is, as he will acknowledge two days later in his fourth-floor suite of offices in East Jerusalem's elegant old American Colony Hotel, "a huge amount still to do". The World Bank report also points out that the lack of Palestinian access to external markets, not to mention resources like land (Israel still directly controls and severely restricts Palestinian development on the 60 per cent of the West Bank classified as Area C) is still stunting any real chance of a sustainable economy. Nor has Netanyahu yet yielded to persistent requests from Blair to allot the promised bandwidth for a second Palestinian mobile phone company that would be as he himself puts, "an important indicator of whether the Palestinians are going to be allowed to run an economy properly".

Today in Qalqilya Blair has not only seen first-hand the impact of the wall here on the Israeli border but has peered over the barrier on the city's north-eastern side – it is a fence there – where it shuts off the local farmers from their own land to protect the red-roofed Jewish settlement of Tzofin. Here in Qalqilya at least it's hard to imagine the economy growing much without a peace agreement that would allow Israel – at least partly – to open its border with the West Bank and remove the settlements that hem in the city to the east. Convinced that economic improve- ment and political progress are mutually reinforcing, he says even of the easing checkpoints round Nablus, Hebron and Jenin: "If political negotiations don't materialise then all this progress will be fragile."

Persistently upbeat, he believes those negotiations will happen; and he does not betray the slightest frustration. He works pretty hard here on his monthly one-week trips, energetically pressing a detailed if unglamorous shopping list of improvements on ministers from Netanyahu down – from permits for a new industrial park in the Jordan Valley to cancelling a bar on expatriate Palestinian businessmen being allowed to enter Israel as well as the West Bank. ("Oh, does that happen in governments?" he says deadpan, when asked if the latter problem is a function of the right hand of the Israeli government not knowing what the left is doing.)

"Sometimes there is insufficient understanding not only on the Israeli side but in the international community that decisions that seem quite small about checkpoints or restrictions actually have quite a big impact on the ability of people to do things," he explains. With an exponentially more detailed knowledge of the territory than he had as a mere Prime Minister, he will tenaciously argue the case for removing a specific checkpoint with the relevant IDF commander: "He drives the Army crazy," acknowledges one senior Israeli official.

Yet though he would never give the slightest hint of it, you cannot help wondering if just occasionally he would like to be free of the limits on a role whose mandate is inevitably narrowed by the fact that the US is going to be the only external agent that can force through the real political progress he knows is needed. Especially since, just possibly, a job with a rather wider remit could soon be in sight.

Blair's team, let alone the man himself, is studiously avoiding the topic of the EU presidency, even in private. He is instead said to be his happy with his extensive portfolio, including the Middle East job, on which he regards himself as having, in a potentially crucial period, a great deal still to contribute. Moreover the inevitably slow progress is hardly surprising, given that a powerful new US President has just failed to persuade Israel to freeze settlement construction for a year. But his reticence also reflects the European political realities; after 10 years as a Prime Minister, Blair is unwilling to launch a public campaign for a job he would almost certainly like but also knows he may not get and in a forum in which the favourite all too often falls at the last fence.

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His candidacy has the support of Gordon Brown – which is not negligible given that Brown has won credit points in Europe for not wavering in support of the Treaty after the Irish voted no the first time. But UK backing is a necessary rather than a sufficient condition. A still-more crucial axis is that between French President Nicolas Sarkozy and German Chancellor Angela Merkel. Charles Grant, the well-informed director of the Centre for European Reform [CER], Britain's leading EU think-tank, says he believes both Merkel and Sarkozy are now on board for a Blair presidency – which he therefore thinks is "looking quite plausible" at present. If Grant is correct, and if Merkel succeeds in casting the Social Democrats into opposition and forming a coalition with the liberal FDP after next week's federal elections, she will have a much freer hand; if she is stuck with the Social Democratic SPD, then their opposition to a Blair candidacy could be a problem.

For deep hostility to Blair, especially in parts of the European left, cannot be overlooked. It's easy to rehearse the reasons; the Atlanticism, the failure to join the euro; the perceived deference to press-inflamed eurosceptic opinion; the economic liberal, free market, free trade agenda, and most of all Iraq. The left of centre "family" in the European Parliament has already been wound up over Jose Manuel Barroso, who was confirmed last week as European commission President but whose hosting, as Portugese Prime Minister, of the fateful Azores summit before the Iraq invasion in March 2003 still deeply rankles. The notion of one of the two chief guests at that Azores event getting an even bigger job is anathema to some MEPs; and while the parliament will not have veto powers over the new presidency, it will have over that of of the also key job of High Representative, the new enhanced EU "foreign minister" the Treaty will also create. Since the two jobs are being presented as a "package", the parliament has the capacity to cause a lot of trouble.

Because Barroso is centre right there may be a groundswell on grounds of balance for an EU President on the centre left. Blair, the most electorally-successful Labour leader in history, is nominally just that. But the danger for a Blair candidacy is that of political orphanhood: the Christian Democrat centre right – not to mention the British Conservatives – may oppose him because he's in the wrong party; but elements of the European left may also do so because they see him as deep down, if not a Conservative, at best a Christian Democrat at heart.

Yet these complaints may miss a crucial point. For whether the member states like it or not this is – assuming the Treaty is approved – a defining moment for the EU. The formal powers of the job remain vague. But what they are will depend very much on who has it, and particularly who has it first, since that may define its remit for a generation or more. One possibility is that the new president is not much more than a chairman of the European Council, a relatively-faceless bureaucrat who remains constantly overshadowed by the heads of the main member states. But the idea behind it was to give the EU a new cohesion as a bloc, to help it punch at or above its weight, and provide – finally – an answer to Henry Kissinger's famous question: "Who do I call if I want to talk to Europe?" Yet that role can only be established if the new president has enough stature to fill it.

Which is where Blair comes in. Ironically if Merkel were to lose next week's election, she would quickly emerge as a consensus candidate. But all the signs are she will win, leaving Blair as pretty well the only potential candidate with that kind of profile. There are no doubt other excellent candidates: three serving prime ministers are in the frame, Jan Peter Balkenende of Holland; Herman Van Rompuy of Belgium; and Finland's Paavo Lipponen. The French PM François Fillon has also been mentioned along with former Spanish Prime Minister Felipe González (whose eligibility as a left candidate is seriously offset by the fact that he a man of the nineties who speaks little English.) All are plausible, provided the assumption is that what the EU needs is merely a businesslike chairman. But can they provide the real leadership that most pro-Europeans believe the EU badly needs if it is to become a more coherent global player in issues ranging from foreign and security policy to world trade?

The CER's Charles Grant confesses to "mixed feelings" about Blair's potential candidacy. On the one hand he worries about his deep unpopularity among elements of the European centre left , because of the Iraq war. "The fact that some people actually regard him as evil could make him less effective in the job," he says. On the other he has no difficulty in spelling out the case for Mr Blair. "I have spent time in Russia, China and India recently and people there say: 'If you want us to engage with the EU, choose someone we've heard of, don't pick Jean-Claude Juncker [Prime Minister] of Luxembourg.'" And secondly, he's a damned good communicator, which is hugely important for an organisation as complex as the EU."

But in any case enthusiasts for a Blair candidacy point out that the worry that Blair is not sufficiently European for the job, is actually perverse. Apart from the fact that in office Mr Blair's instincts, if not always his achievements, were decidedly European, they argue that no-one who has watched him over the last decade can doubt that in such a job he will be a "good European" – using whatever levers and bases of power are available to him. According to Denis MacShane, a Europe minister under Mr Blair: "Europe has a huge choice to make – whether to think big or behave small. Big means Blair; small means AN other Prime Minister who can chair a meeting adequately but will not have the necessary leadership transcend the Brussels bureaucracy and the nationalist egos of the 27 EU member states."

If that is right, there is a paradox here; that to choose a leader who as a Prime Minister failed to take his country into the eurozone and chose to break with "old Europe" over his bitterly controversial support for the US military invasion of Iraq may actually be the most "European" thing to do. Which is exactly the reason why, after early indications that David Cameron would be relaxed about Mr Blair getting the job, his deeply eurosceptic shadow foreign minister William Hague came out so vigorously against a Blair candidacy in July. There is already plenty of anxiety in Brussels about a future Tory government; indeed the nightmare scenario for many Europeans about Lisbon is that if the Irish vote yes, Czech President Klaus could delay the Treaty long enough for David Cameron to carry out his pledge to hold a referendum on the Treaty if it has not been ratified – one that could sabotage it once and for all.

Even if Lisbon goes through, the return to office of a British Conservative government whose hostility to pooling even those elements of national sovereignty which give the EU's members – including Britain – a greater global influence on issues from climate change to world trade, could pose real problems. In that event, the argument goes, what better counterweight than having at the helm of the EU the one British figure capable when necessary, by influencing British public opinion in a contrary direction?

"If you think it's foolish to pull out of the European Defence Agency," says Charles Grant, "if you think it's idiotic not to participate in the external action service [the new diplomatic network under the Lisbon Treaty] and Blair is there to tell the British public so, then you're going to think 'thank God for that'." The implication is that if the Europeans want to avoid the big knock-down destructive fights with its second-biggest net contributor that characterised the Thatcher years, then having Blair in the most powerful EU job may be an insurance policy against it happening.

Back in Qalqilya Blair is focused solely on the job in hand. He has given a mini-press conference with Mr Khandaqji in the Governor's office, enlivened by a sharp exchange between a Palestinian journalist and the Governor himself about the journalist's accusations of PA corruption. On the wall behind him are portraits of Yasser Arafat and his successor Mahmoud Abbas. In the street outside, watched approvingly by the Envoy's plain-clothes British protection officers, two uniformed Palestinian police drivers park a pick-up and a blue and white police car behind his UN convoy, ready to escort him to his next stop and exemplifying the significantly enhanced security across the West Bank ordered by the Palestinian Prime Minister Salam Fayyad. On this peaceful, sunny morning it's hard to remember that these are members of the force which killed a top Hamas commander in a shoot-out which left six Palestinians dead in the city in May.

Unfazed by the increasingly-heated argument inside the room, Blair wraps it up, as he must have countless discussions in the British Cabinet, by remarking with a grin that "we're unlike to reach an agreement on this now". He still shows every appearance of being engaged by the job here, remarking two days later that it would be a "profound mistake" to think that with US engagement, relative quiet in Gaza and a "little bit of progress in the West Bank "you could just say well, OK, lets take the pressure off everybody and ... carry on as we were. This is building up to a point where the energy needs to be channelled into a clear way forward." If it isn't so channelled, he adds with some understatement, there will be a "problem".

So the question is not so much "whither Blair?" but "whither Europe?" Blair, who would presumably not drop his interest in this region if he became the EU president, would surely like the job, but not so much that he is launching a public campaign for it. And he is far from being the ideal candidate from the point of view of the European left. But if Europe is to fulfil the goals of Lisbon, the left is not spoilt for choice. The danger of the coming argument on his eligibility for the job is that it may avoid the biggest question of all, which may not be posed again for a generation: what sort of Europe does Europe want? MacShane argues that "big Europeans from Churchill to De Gaulle to [former European Commission President Jacques] Delors" all had their faults but also "the vision and communication thing which even Tony's bitterest enemies can't deny he has. Blair believes passionately in Britain and has equal faith in Europe. And faith and passion are not in abundant supply in the eBay of European leadership."

After Downing St: What Tony did next

27 June 2007

Resigns as Prime Minister of Great Britain and Northern Ireland after 10 years in office. On the same afternoon he is officially confirmed as the Middle East envoy for the United Nations, the European Union, the United States and Russia.

26 October 2007

Signs a deal with Random House to write his memoirs for a fee thought to be in the region of £5m.

14 November 2007

Opens the Tony Blair Sports Foundation to nurture young sporting talent in areas suffering social exclusion.

21 December 2008

Leaves the Anglican Church to become a Roman Catholic, after a meeting with Pope Benedict XVI on one of his final official trips while PM.

9 January 2008

JPMorgan Chase confirm that Blair will be joining the investment bank in a "senior advisory capacity". He also advises Zurich Financial Services on climate change, pushing his combined earnings beyond £7m a year.

7 March 2008

Yale University announce that Blair will teach a course on issues of faith and globalisation as a Howland Distinguished Fellow. His aides express concern at his ever-increasing workload.

14 March 2008

Launches his "Breaking the Climate Deadlock Initiative" in partnership with the not-for-profit organisation, Climate Group. He commissions a team of scientists from Cambridge University to examine the likely econ-omic consequences of climate change.

26 May 2008

Cherie's autobiography, "Speaking for Myself", is published. In it, she confesses that she fell in love with Tony on the top deck of a bus, saying: "It was a double-decker and we went upstairs. It was completely empty and by the time we got off we knew each other better than when we'd got on."

30 May 2008

At the launch of his new Faith Foundation in New York Blair says he wants to spend the rest of years ensuring that religion is seen as a force for good in the world.

22 May 2008

Queen's University Belfast award the former prime minister an honorary law doctorate for distinction in public service and for his role in the Northern Ireland peace process.

3 May 2008

With his wife Cherie, Blair adds a £4m stately home in Buckinghamshire to his property portfolio, which also includes to two houses in London, two flats in Bristol and his former constituency home in Durham.

7 November 2008

Actor Ioan Grufford plays Tony Blair in Oliver Stone's Bush biopic "W", becoming the fourth actor to play him in a major TV or film production.

13 January 2009

President George W Bush awards his closest ally in the War on Terror the Presidential Medal of Freedom, America's highest civilian honour, in a ceremony at the White House.

5 February 2009

Blair beats Brown to be the first world statesman to meet and shake hands with President Obama as he delivers the key-note address at a Washington prayer breakfast. Obama calls Blair "my very good friend".

April 2009

Blair lists his home as "Jerusalem" in the VIP visitors' guest book at the British Embassy in Washington.

17 May 2009

Tel Aviv University awards Blair the Dan David prize for leadership for "achievements having an outstanding scientific, technological, cultural or social impact on our world". Blair donates the £1m prize to the Tony Blair Faith Foundation and to the university.

8 September 2009

Appears on "The Late Show with David Letterman" in New York, saying it was "right to stand shoulder to shoulder with America" during the War on Terror. Midway through the interview six topless men, who had the word "MAGGIE" spelt out on their chests, storm out of the studio in mock disgust, apparently upset it was Tony Blair and not Margaret Thatcher who was making an appearance.

22 September 2009

Blair's official spokesman denies Liberal Democrat claims that he may have known about British complicity in the torture of terrorist suspects abroad.

JAMIE MERRILL