By Graham DinesPolitical EditorTONY Blair was on course last night for a historic third term in office – but a joint BBC-ITV exit poll indicated Labour's overall majority could be slashed to 66.

By Graham Dines

Political Editor

TONY Blair was on course last night for a historic third term in office – but a joint BBC-ITV exit poll indicated Labour's overall majority could be slashed to 66.

The first result of the election, declared in Sunderland South, confirmed the trend when Foreign Office minister Chris Mullen held the safe Labour seat but with a swing to the Conservatives of 4%.

The exit poll indicated that the Tories would gain around 40 seats, far more than opinion polls during the campaign indicated, and that the Liberal Democrats could actually losing ground to have just 53 MPs instead of their current 55.

Tory leader Michael Howard's job would be secure if the party manages to gain a substantial number of seats. If the final result mirrors the exit poll, then Liberal Democrat leader Charles Kennedy could be under pressure to stand aside for either Simon Hughes or Mark Oaten.

Labour, according to the exit poll, would see their number of MPs tumble from their present 409, with the Tories boosted from their current 164.

Labour's election co-ordinator Alan Milburn told the EADT: "If this exit poll is right, then Labour would have secured a third term for the first time in the party's history."

Deputy Prime Minister John Prescott conceded the election result was "too difficult to call. I always want a good result, I always want to see a Labour Government and there's going to be a Labour Government – there's no doubt about that."

If true, the exit poll will confirm Labour's worst fears that nationwide polling showing them comfortably ahead of the other two parties, and heading for a three-figure majority, seriously under-estimated the effect of Conservative and Liberal Democrat campaigning in key marginal seats such as Braintree, Harwich, Great Yarmouth, Peterborough and Cambridge.

The polls closed at 10pm after an intensive three-and-a-half week campaign with Mr Blair, Conservative leader Michael Howard and the Lib Dems' Charles Kennedy criss-crossing the country clocking up thousands of campaign miles.

Mr Howard had targeted issues such as immigration and asylum that he hoped would bring voters back to the Tory fold.

If he has cut back Mr Blair's majority by the size the poll suggests, the Conservative leader will see it as a vindication of his campaigning tactics.

And the Prime Minister's plans to serve a full term, before a smooth handover of power when he steps down, could be called into question as maverick backbenchers will inevitably call for him to go sooner rather than later.

Labour strategists virtually shackled Chancellor Gordon Brown to Mr Blair, realising that his popularity could rescue the campaign following deep the Iraq war deep unpopularity among core voters

Labour insisted throughout that a protest vote for the Liberal Democrats because of concerns over issues such as Iraq would let the Conservatives into government.

Charles Kennedy dismissed the tactic as "claptrap"' and repeatedly urged voters to curb Mr Blair's Commons majority so that he could not "ride roughshod'' over Parliament and his own party.