The following correction was printed in the Guardian's Corrections and clarifications column, Tuesday September 28 2004
In an extract below, we report that in the run-up to the 1997 election, Sir David English was the editor of the Daily Mail. That is incorrect. Paul Dacre succeeded Sir David as editor in 1992. A spokesman for the Mail says Mr Dacre was accorded complete editorial autonomy by the then chairman - an independence that Sir David, by then editor-in-chief, also accepted. By 1997 Tony Blair had achieved an extraordinary turnaround in making his party acceptable to the Australian media mogul, Rupert Murdoch. In stark contrast to the denigration of Neil Kinnock in 1992, New Labour's wooing of Murdoch paid handsome dividends with a ringing pre-election endorsement from the Sun. But Blair had an even greater public-relations prize in mind: he was desperate to secure the support of the Daily Mail - the essential organ of middle England.

Fortuitously, before the election, Blair's desire dovetailed neatly with the wishes of Sir David English, then editor of the Daily Mail. English was desperate for a peerage. John Major would have dearly loved to oblige - but every time English's name got near the top of the list, the Mail erupted into a frenzy over Major's stance in dealing with his Eurosceptic rebels. So it was out of the question.

In the run-up to the 1997 election, though, there was an alternative prime minister in the wings. It was therefore no surprise that a series of discreet lunches took place in the Blairs' Islington home between the Associated Newspapers group's proprietor, the elderly Lord Rothermere, David English and the Blairs.

Blair was anxious to win the Mail's support for New Labour; English, in turn, was keen to please. English even took advice from Lord Wakeham - a former Tory cabinet minister as well as chairman of the Press Complaints Commission - on what would be the best way to woo Blair. In the end, both sides got a result.

Rothermere and English decided that the London Evening Standard would back Blair but the Mail would stay with the Tories. The decision was helpful - some of the biggest swings to Labour in 1997 took place in London, costing Tory stars like Michael Portillo their seats. English was ultimately awarded a life peerage but died from a stroke four days before it was due to be announced.

In a statement on June 10 1998, Blair said: "I counted David English as a friend. He was a truly outstanding journalist." Blair's spokesman said Buckingham Palace had given its permission for No 10 to announce that English was to be made a life peer ahead of the public announcement of the birthday honours on Saturday.

In government, Blair initially maintained his cordial relationship with Associated. But Cherie, who has never been a fan of the Daily Mail, could not acquiesce.

On January 24 1999 the Mail on Sunday published a contentious article headlined: "Parents' Fury over Blairs in School Place Row." The story reported complaints from local parents that the Blairs had received preferential treatment in getting their daughter, Kathryn, into the Sacred Heart high school in Hammersmith - a well-regarded Catholic state school. A complaint was filed to the PCC in both the Blairs' names.

The Mail on Sunday offered to publish a correction to avoid a PCC judgment against it. But it became clear in negotiations between Guy Black, director of the PCC, and Alastair Campbell that Downing Street was not interested in a mere correction. It dawned on Black, who became increasingly frustrated at the failure to reach a deal, that it was Cherie who was driving the issue. "It looked to me that Alastair himself was having difficulty handling Cherie," Black told us. "He made it very clear to me that he must have a win against Associated Newspapers."

Cherie won the case and the Mail on Sunday was duly castigated. Much more than her husband, Cherie has what Lord Wakeham describes as "a commendable mother's instinct to protect her children" from media exposure.

Relations with Associated were never as warm after the death of David English. Compared with his predecessor, the present editor of the Daily Mail, Paul Dacre, tends to appear chilly and aloof. When he, the new Viscount Rothermere, and their respective spouses, went to dinner with the Blairs at Downing Street in autumn 2000, it did not seem likely to be a particularly warm encounter.

So it came as a pleasant surprise when Cherie produced the Blairs' new baby, Leo, for everyone to admire. But then the domestic informality went a little too far for the guardians of middle England. Cherie undid her blouse and began breast-feeding Leo. Dacre and Viscount Rothermere took Cherie's action to be a deliberate act of political hostility - whose meaning was to show the "forces of conservatism" that liberal values now held sway. The Mail's owners and executives left in a state of shock.

In March 2003, Guy Black was summoned to Downing Street. Black remembers arriving at the door and being asked to go up to the prime minister's private flat. He had to clamber over lots of toys on the floor - Cherie's friend Carole Caplin was playing with Leo. Also in the room were Blair and Cherie and Fiona Millar.

"Cherie looked like a volcano that was about to erupt," he recalls. The prime minister began the conversation. He said he wanted the advice and help of the PCC on a very difficult situation: he wished for his children to be completely removed from the media spotlight. "I would like to have a similar agreement which has been reached between the press and the royal family over the coverage of William and Harry," he told Black. By this he meant a special press ban covering the prime minister's family. In effect, he was asking for his family to be treated like royalty.

"I am afraid we cannot do this, prime minister," Black replied. "Your children are not going to be public figures in their own right. William and Harry are heirs to the throne. We are certainly willing to take up any complaint about the breach of their privacy - but we cannot give an undertaking to do that."

Blair frowned. Cherie looked furious. The prime minister was interrupted by a telephone call from the Russian leader, Vladimir Putin. As he left, Cherie exploded: "I must complain to you about the Daily Mail - it is a disgraceful paper," she raged. "They have just suggested that I bought a cheap bottle of wine for Tony's birthday. This is a complete lie - it was a very expensive bottle. What are you going to do about it?"

"Well, again, if you have a complaint you should take it up with the editor of the paper," replied Black evenly, "and if you are still unhappy, you can take it up with us." Since then, Cherie has inundated the Daily Mail's lawyers with complaints about coverage of herself and her husband.

Despite Black's refusal to be browbeaten on that occasion, the PCC has intervened this year on the Blairs' behalf to keep a private family problem out of the newspapers. But the Blairs had another strategy: in an unprecedented agreement between a serving politician and a global media organisation, News International proprietor Rupert Murdoch has imposed a worldwide ban on his newspapers reporting the matter.

Two of Murdoch's foreign titles planned to run detailed articles on the Blairs' family troubles. The Australian pulled its story after News Corporation's executive chairman, Les Hinton, made a call to the deputy editor telling him the tale was off limits. The New York Daily Post withdrew its piece after similar pressure was brought to bear. The deal is thought to have been brokered by Alastair Campbell, who, though no longer Blair's press spokesman, is believed to be Blair's ambassador to Murdoch.

The big chill: No 10's manoeuvres to block labour laws

When Labour came into office in 1997, the European commission was trying to introduce a directive on information and consultation, designed to stop employees hearing on the television (or, in some notorious cases, by text message) that their factory had been shut and they were out of a job.

The directive would require employers to inform and consult trade union representatives when closures were contemplated.

Soon after Blair became prime minister, the ETUC, the European Trades Union Congress which represents European trade unions in Brussels, was startled to find that the directive had a strong and determined enemy in the new British government.

"Britain went to war to block the directive," is how John Monks, then general secretary of the British TUC, puts it.

The story of that war has never been told. Blocking the directive was going to be hard, because four countries were required to veto it and there were only three that opposed it, including Britain.

The Blair government set out to recruit a fourth - Germany

But trade unions in Germany already had these rights to consultation, so German employers saw no need to block the European directive.

So Peter Mandelson was sent on a secret mission to Germany as Blair's emissary. He explained to Chancellor Helmut Kohl's office how important the British government considered it to get the directive blocked. Kohl took some persuading, but finally he and the German employers' organisation agreed to change their stance, as a favour to the Blair government.

John Monks heard about Mandelson's mission from his ETUC contacts. When a TUC delegation visited Downing Street, its members told Blair they thought it incredible that a Labour government should place itself in this position. Blair's reply was that he must keep the business community onside. He went on to say that he did not want the British people to think he was dictated to by the TUC.

Soon afterwards, the Christian Democrat Kohl was voted from office, and a new Social Democratic chancellor, Gerhard Schröder, succeeded him.

In 2001 Schröder was re-elected, and he privately told both Blair and the ETUC that he would no longer block the directive. So it went through, though Britain managed to get it watered down. The British representative at the ETUC, now Peter Hain, abstained rather than be defeated.

Britain also led opposition to the proposed directive on agency workers, which would give these workers the same rights as permanent workers.

"The British government blocked that ferociously," says Monks. "We would have it without the [intervention of the] British government.

Later, there was the working time directive, which so far Blair has also succeeded in blocking. The directive said that normally no one should work more than 48 hours a week, and that if they did, it should be part of a collective agreement.

"Tony Blair is unlike any previous Labour leader in that he does not think a Labour government ought to enhance collective bargaining," says John Cruddas, now the Labour MP for Dagenham.

When New Labour came to power in 1997, Cruddas went to Downing Street as deputy to Blair's political secretary Sally Morgan.

He had been in Congress House, the TUC headquarters, on the night of the 1997 election, and recalls union leaders' growing apprehension as they saw the scale of the election victory. They knew the stronger Blair was in parliament, the less chance they had of getting a pro-union government.

As almost the only pro-union voice in the Downing Street court, Cruddas regularly found himself summoned into the "den" by Blair to fight it out with Geoff Norris from the Downing Street policy unit, whose job was to keep in touch with employers and the CBI.

Cruddas would put the union view, Norris the employers' view, and Blair would arbitrate between them.

"It was a cold climate for pro-union ideas in Downing Street after the 1997 election," says Cruddas.

"There was a lot of empty third way rhetoric, the cult of newness. It wasn't a labour-movement place at all." Blair, he says, thought that "trade unions were endearing in an old-fashioned way, part of the legacy he had to work through".

Cruddas left Downing Street after three years, convinced there was nothing more he could achieve there.

Hutton: the selection process

Blair needed someone to conduct the inquiry into David Kelly's death who was not likely to cause him avoidable political damage. He turned for advice to two of his closest confidants, Lord Falconer, the new lord chancellor, and Peter Mandelson. Both came up with the same name - Lord Hutton - but for different reasons.

Lord Falconer knew that in judicial circles Hutton had a reputation for independence but also a deep respect for the security services. Northern Ireland judges are loth to criticise the security services, for one simple reason - their lives depend on them.

So he gambled that Hutton would be very unlikely to want to criticise John Scarlett, the chairman of the Joint Intelligence Committee, too severely. If Scarlett escaped serious damage, Blair stood a fighting chance.

Mandelson provided another vital piece of intelligence. When he was Northern Ireland secretary, Mandelson had noticed that Hutton was extremely careful when dealing with both IRA and loyalist terrorist cases to stick closely to the facts of the case and take into account only that evidence which bore directly on the issue of the accused's guilt or innocence.

Hutton, Mandelson suggested, could be relied upon to steer clear of controversial issues, provided his terms of reference were strictly limited.

Hutton himself emphasised in his opening address: "I do not sit to decide between conflicting cases - I sit to investigate the circumstances surrounding Dr Kelly's death."

· The Blairs and Their Court by Francis Beckett and David Hencke is published by Aurum Press on October 29 priced at £18.99. To order a copy for £18.04 with free UK p&p, call the Guardian Book Service on 0870 836 0875, or go to theguardian.com/bookshop