"I've been politically conscious of every government, and followed them all closely, since 1924," Baroness Castle declares. 1924? To look at her, it is just about believable that she is an 89 year old reflecting on a long political life. She is small, frail and nearly blind. To her intense annoyance, she cannot read newspapers and it is expensive to pay for someone to read for her. The radio is her lifeline and she watches the TV, without being able to see much that flickers across the screen.

But look away and you hear the animated voice of someone who sounds much younger. The passion, anger and wit are all intact. She has strong views about the Blair government, but she feels passionate also about the administrations in which she served and the political personalities who dominated her life.

Time has not healed ancient rifts, nor diminished her admiration for old allies. Nor has age withered her political activities. She is active in the Lords and speaks at meetings around the country. As for her social life, Castle and her fellow octogenarians make some of us still in our thirties feel pathetically inadequate. At one point, when speaking of her relationship with Michael Foot, she says, "I was talking to Michael on the phone last night. We were going to meet up this week, but then he decided to go on holiday to Bermuda, so we'll have to wait until he gets back."

There is no surprise that she has great affection for Foot. It is her burning defence of Harold Wilson which is more revealing, partly because Labour's great election winner remains out of fashion. "Oh Harold . . ." she says with a twinkle in her voice. She pauses and then adds what she seems to regard as a necessary preface to her political assessment. "Let me make it clear, I was never Harold's mistress. These rumours prevent Harold getting the credit he deserves. Harold believed in women. He believed in their importance in society. He was always looking for ways of promoting women. In a way that still hasn't been properly recognised, Harold was a true progressive. When he brought me into government, he told me he wanted me to go to Transport. I told him I wasn't keen. But he was persuasive, telling me I'd be the first woman to occupy that post. He was the first prime minister to actively promote women in governments."

Castle does not accept the view of Wilson as a pragmatic party manager, with few beliefs of his own. For example, she is convinced that he was always in favour of Britain being a member of the Common Market (Castle was a firm opponent), but had to navigate the party with agonising dexterity. "He was a man of principle. Harold always wanted to go into Europe, but he didn't want to get too ahead of the party. In the early 1970s, I remember he was having a terrible time. He was making pathetic evasive speeches and some of his friends became very worried about him. I said to him, 'Harold, you've got to come out on Europe, one way or another.' He replied, 'Barbara, I regard it as my sacred duty to keep the party together. I know where I want to go on Europe, but I'm not going to do it if it wrecks the party.' And then he said to me, 'I've been doing this for eight years over Europe and it's been hell'."

Some of Castle's contemporaries believe that her views on leaders are suspiciously shaped by the way she was treated by them. Certainly, Castle has never forgiven James Callaghan for sacking her when he became prime minister in 1976. Her relationship with Callaghan is an example of the passions that time cannot heal: "I think it is safest all round if I don't comment on him." There seems little point in probing further, but she cannot resist a discreet turn of the dagger. "What I will say is that, if Harold had stayed on, we would have won the following election and history would have been very different."

She is much more expansive about Callaghan's successor. "I love Michael, not in a sexual sense, you understand. I put it that way at Jill Craigie's memorial last month because I thought there was no point in pussy-footing around in these areas. Mind you, he likes the flesh-pots, does Michael. I don't know what it is between us, though. He is a very generous man, too generous at times. But, having said that, I did not think he was up to the job when he became leader in 1980. I supported him against Callaghan in 1976, but by 1980 he was too old."

She believes that Neil Kinnock would have won in 1992 if the Conservatives had not ditched Margaret Thatcher and replaced her with a very different type of political personality. "We were going around saying it was time for a change, and the voters thought that the change had already taken place when John Major arrived at No 10 not long before the election."

As for her views on Tony Blair, she adopts the same diplomatic restraint that she applies to Callaghan. "Let us just say that the jury's out." But, again, she cannot resist a follow-up. "I thought it was very interesting on that programme about Blair's 1,000 days. He said that he had never been very interested in politics and was a committed Christian." She adds only a little ambiguously: "I think that explains rather a lot."

Part of her disagreement with the Blairites is over the way, she believes, they have distorted the party's past, dismissing much of it in the contemptuous phrase "old Labour". "They do not seem to have realised that all governments, whatever their complexion, end in apparent failure. Macmillan was triumphant in 1959 and was biting the dust shortly afterwards. Heath won in 1970 and spent three and half years doing U-turns, looking for the perfect answer. Thatcher was a remarkable woman, but her premiership ended in ignominy. But the current leadership seems preoccupied by the failing of Labour in power and in opposition."

She is infuriated by any implication that "old Labour" was unaware of the need to "modernise", one of the Blairites' favourite words. Her political hero is Nye Bevan, whom she describes as "the first great moderniser". "He was the arch rebel, passionate about the need for change, but he was also pragmatic. He always said that, for the political student, his holy grail is the living truth. How many of this lot would put it in such a poetic way now? He introduced the NHS, which was a seismic change. It met such a need for human beings. The Tories despised the NHS, but Middle England wouldn't let them destroy it. Through such policies as the NHS, we had a powerful appeal to Middle England. There was a wisdom about Nye, a sensitivity about Nye."

Would new Labour have introduced the NHS? "No, of course not. It would have been too expensive for them and they would have worried about the opposition of the doctors and some in the media. They would have involved the private sector much more."

She stresses that her criticisms come from the centre left and not from a more extreme position. "Harold always used to say to me, 'you're soft left'. Well, I never knew quite what he meant - but I was never one of the impossibilists on the ultra left and we can all think of one or two well-known people who fell into that category. I also agree with the need to modernise the party machine, although again there is nothing new in that. It was Harold who compared it to a penny-farthing machine. And I remember joining the election campaign committee in 1983 and being horrified by the chaos. It was pathetic. There was no real machinery there at all. Blair is quite right about the need for an effective party machine."

Looking much further back, some early political errors are acknowledged, although she places them in the context of the deep depression of the 1930s. "We were influenced by the Soviet revolution, but for us it was much more of a moral concept: production for the people, not for profit. Remember we were struck by the wickedness of mass unemployment and looked to the Soviet Union to see if they had any solutions. Mind you, hardly any of us were besotted Stalinists."

At which point she pauses. This is the only time in the conversation that I am reminded of her age and its limitations. "I wish I could read more. I need to know more about that period. One question has been on my mind recently. What would have happened if Lenin had lived longer? He wanted a more liberal economic policy and tried to keep that awful Georgian out of office. Things might have been different in Russia and for the rest of us if Lenin had kept Stalin out."

Now her energies are focused more on contemporary policies. "Under new Labour, we seem to accept market economics, unchallenged globalisation and the dominance of the multinationals. There's a real danger that power is being passed from the people to big business. The government is doing lots of good things, but it is this big picture, as they put it, that worries me."

In particular, she is worried that unemployment could again be seen as an inevitable and unavoidable consequence of the market economy. "Who was that creep who was the Tory chancellor who argued that unemployment might be necessary?"

I suggest Geoffrey Howe. Her wit is still razor sharp. "No, dear, he was the sheep, not the creep." Norman Lamont was the name she had been seeking. "How could anyone say that unemployment was a price worth paying? Mind you, he soon paid for that statement by losing his job."

Although this government has introduced a number of schemes that have created jobs, she fears that the pre-Thatcher political consensus on the evil of unemployment has been broken. "Until 1979, politics was a rolling story. It was not about old and new parties. Harold Macmillan had a hatred of unemployment. So did Ted Heath. They were horrified by the waste."

She does not waste a single moment, it seems. Her schedule over the next few days includes voting in the Lords, speaking in debates, attending a rally in Manchester. And, of course, there's that drink with Michael Foot once he has returned from Bermuda.