IN SEVEN weeks time Tony Blair's Government faces its biggest electoral test before the next general election. On Thursday 6 May voters in Scotland, Wales and virtually all the local authorities go to the polls in what will be seen as a mini general election.

I can't help but observe, in passing, that the only substantial part of the country not voting is London, where the Government has decided to defer the election of the new mayor and assembly to May 2000. This is particularly disappointing as originally Tony Blair made it clear that he wanted the newly elected mayor of London standing by his side at midnight on 31 December as a sign of a new London in a new millennium. Sadly, since I have been ahead in the polls this seems to have slipped down the list of government priorities.

In any case, the spin doctors were doing their evil work over the weekend implying that if Labour does badly in these elections the blame will rest squarely with Labour Party General Secretary Margaret McDonagh. Given that it was only last October that the same spin doctors were greeting her appointment as a huge step forward for the party, I think she has every right to feel a bit aggrieved. I know how she feels - loyalty just doesn't seem to be a virtue that is valued highly in the Millbank Tendency.

The trouble for Labour is that we could easily lose 2,000 local council seats even if we were doing better than we were doing in the general election in 1997. All these council seats were last fought in May 1995, which was Labour's best ever year for local government results, and the Tories' worst. It's only if the losses go well beyond that level of 2,000 or so seats that the Labour leadership might start to worry.

The situation with the new Welsh and Scottish elections is even more problematic as these are being fought under a type of proportional representation. Given that both Scotland and Wales are areas where Labour has won huge majorities under the first-past-the-post system, any superficial analysis on election night is bound to be filled with doom and gloom.

There is no doubt that the struggle between Rhodri Morgan and Alun Michael for the leadership of the new Welsh Assembly has caused a huge slip in Labour's Welsh support. The Millbank Tendency are trying to blame Rhodri Morgan but the facts suggest the reverse. Now that Alun Michael is leading the Labour campaign our support has slipped to 51 per cent of Welsh voters but those same polls show that had Rhodri Morgan been selected as Labour's leader our support would be at 64 per cent.

It wasn't the contest for Labour's leadership which damaged us but the way in which the most unsavoury aspects of Old Labour's vote-fixing and block-vote-wielding past were exhumed in order to defeat Rhodri. The ghastly apparition of the Welsh TGWU ignoring its members' overwhelming wish to support Rhodri Morgan has been fixed firmly in the public mind.

The situation in Scotland is quite different. Donald Dewar is a canny Scot who understands inside out the Scottish Labour Party to which he has given a lifetime's service. Donald has reached out to the left by appointing Campaign Group member John McAllion MP as a key figure in his Shadow Cabinet. Donald knows that he cannot govern Scotland without the Scottish left and he also knows that his biggest danger is that the SNP is going to attack Labour's record from the left.

By making the issue of Gordon Brown's budget income tax cut the central plank of the SNP campaign, their leader Alex Salmond has recognised that he has absorbed just about all the disaffected Scottish Tory voters he is going to get and the only way forward for the SNP is now to strike at the heart of Labour's traditional Scottish power base.

Don't be surprised if Labour's Scottish campaign sounds distinctly more Old Labour the closer we get to polling day. That is certainly preferable to the strategy of negative campaigning and attack ads that some of the Millbank Tendency want to unleash against the SNP and Plaid Cymru. You would have thought they would have learnt from their mistake here in London as their relentless off-the-record attacks on myself have spectacularly backfired and led to an increase in my popular support in the polls.

The one issue which Labour is likely to avoid but we cannot really duck is the issue of the overall subsidy that Scotland gets from the rest of the UK. If the people of London received the same level of spending on public services as the people of Scotland we would have pounds 4.4bn a year more to spend on modernising our schools and health service and tackling the appalling concentration of poverty in the inner city. I make it quite clear that I am not for one minute calling for that subsidy to Scotland to be reduced by one penny. All I ask is that Londoners who are helping to pay for it should have the right to the same level of services as people north of the border.

It is this key issue of the better level of public spending in Scotland which points the way for Labour to become the natural majority party of England. All through the 1980s, as Labour was being slaughtered at the polls by Mrs Thatcher, the Tories were being driven into extinction in Scotland. Of course it could be that Labour's Scottish candidates were just more intelligent and attractive than us English dullards. A more plausible explanation might be that Scottish voters were more determined to defend the superior public services they enjoyed, whereas the often much lower levels of public spending in England allowed Mrs Thatcher to drive a wedge between disillusioned voters and public services that too often let them down due to underfunding.

It is true that the vast distances in Scotland make the provision of public services more expensive, but the appallingly high costs of land in London similarly drive up costs. If the whole of England was lifted up to Scottish levels of spending then Britain would start to see its proportion of GDP going to the public sector reaching the sort of levels that are taken for granted in France and Germany and would open the way to Britain becoming a modern European state.

Livingstone's election-winning strategy that also puts us at the heart of Europe? Something tells me the spin doctors won't wear it.