In a major speech, he said the "war on terror" may last a generation but to retreat would be a "catastrophe".

He also admitted the Army was doing more than planned and that there were "real problems" with military housing.

The Tories said Mr Blair's legacy would be an "overstretched" army. The Lib Dems said his foreign policy had "severely" harmed Britain's reputation.

Speaking aboard HMS Albion in Plymouth, the prime minister said Britain and the world faced a "new and different" security challenge following 11 September 2001.

And Britain had to choose whether it wanted to be in the front line of the global fight against terrorism, or retreat to a peacekeeping role.

"My choice is for armed forces that are prepared to engage in this difficult, tough, challenging campaign, to be war fighters as well as peacekeepers," he told an audience of servicemen.

He said he wanted to keep a strong American alliance and "for us as a nation to be as willing to fight terrorism and pay the cost of that fight wherever it may be".

But he acknowledged that Britain's armed forces were under strain fighting twin campaigns in Iraq and Afghanistan.

'Unnerved'

"It is true that operational commitments are at a higher level than originally planned. Service personnel are working harder and for longer than intended," he said.

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And although he believed the condition of service accommodation had been "exaggerated," resentment over it was more "raw" among the military, because of what was being asked of them.

"The extraordinary job that servicemen do needs to be reflected in the quality of accommodation provided for them and their families, at home or abroad," said Mr Blair.

Mr Blair admitted public opinion was divided over Britain's military campaigns and "unnerved by the absence of victory" in its traditional form.

'Too late'

But he argued against political disengagement and said that Britain must be prepared to fight for its values and that defence spending would have to increase.

"Terrorism cannot be defeated by military means alone, but it can't be defeated without it," said Mr Blair.

But shadow foreign secretary William Hague said soldiers wanted to know what Mr Blair was going to do now, about their accommodation, allowances, medical care and equipment.

Mr Blair acknowledged troops were under strain

"After a decade in power, his legacy will be an overstretched army, navy and air force. It's too late to have a 'debate'," he said.

And Lib Dem leader Sir Menzies Campbell said military action in Iraq, undertaken without UN authority, had "severely damaged Britain's reputation".

"Britain has to learn that we will only be at our most effective in tackling terrorism when we operate within the rules and with allies of the same mind," he said.

Left-wing MP John McDonnell, who intends to stand for the Labour leadership once Mr Blair resigns, said Mr Blair had made "catastrophic foreign policy mistakes".

Scottish National Party leader Alex Salmond said Mr Blair had made the world "a more dangerous place" and was "clearly trying to foist that legacy onto his successor".