Tony Blair has urged the Labour Party to set its sights on an historic third term in power.

Speaking at a party policy making meeting, the prime minister called for unity in the run up to the next general election.

Warning against division, he said another election victory was now within the party's grasp.

"Generations of members of this party have only ever dreamt of this opportunity and this possibility of winning a third term," he said.

"We have that possibility within our grasp. We have come through an immensely difficult time."

The statement came at the end of a tough week that saw the prime minister emerge upbeat about his prospects.

Despite renewed questions about his handling of Iraq intelligence, at his weekly press conference on Thursday Blair indicated that he was ready to see through another five years in power.

Putting leadership speculation behind him, the prime minister said on Saturday that there were still challenges ahead for Labour.

He said it was vital to avoid the kind of internal splits that kept the party out of power for 18 years.

"We have given up the luxury of criticism for the obligation of decision," he said.

But Blair added that "with the pain has come the gain".

"I know that just occasionally we all wish it didn't have to be like this: that maybe we could have won as we were, that we could have governed without quite so many tough decisions, that we could win again in a more confined and safe way.

"Unfortunately it's not true."

And looking at ways to develop party policy, Blair indicated his support for options that offer voters "a strong, clear and personal offer for the future".

He indicated that family policies would play a key role in a third term.

A commission to examine women and work would be established, said Blair, tasked with finding ways of ensuring all women get a fair deal in the workplace.