LONDON, England — British Prime Minister Tony Blair, setting out his priorities after winning a historic third term with a significantly reduced majority, has told the country: “I have listened and learned.”

With the general election count still incomplete but the Labour Party’s majority assured, Blair went to Buckingham Palace on Friday morning to be confirmed as prime minister for the third time.

Speaking afterwards at his official Downing Street residence, Blair said: “I know that Iraq has been a deeply divisive issue in this country. But I also know and believe that after this election people want to move on, they want to focus on the future in Iraq, and here.”

Labour needed at least 324 seats to form a majority in the 646-seat House of Commons.

With 620 seats reporting, Labour had 353 seats, the main opposition Conservatives 195, Liberal Democrats 60 and independents and smaller parties 12. Labour’s majority of 161 in the last Parliament had been slashed by almost 100 seats.

Opposition Conservative Party leader Michael Howard said Friday he planned to step down after the party suffered its third consecutive defeat at the hands of the Labour Party.

“I did not achieve what I set out to achieve,” he told supporters.

Howard said he would stay on until the party decided when and how to elect a new leader.

In one of the biggest upsets of the night, a radical left-winger stormed to victory in a Muslim-dominated district in east London.

George Galloway, who was expelled from Blair’s Labour Party, used his victory speech to launch a withering attack on the prime minister.

“All the people you killed, all the lies you told, have come back to haunt you,” he said. “The best thing the Labour Party could do is sack you tomorrow morning,” he said to cheers from the audience. (Full story)

Analysts say the slip in Labour’s lead could loosen Blair’s grip on power and prompt calls for him to step down before he has served a full five-year term. His cabinet colleague and rival, powerful Treasury chief Gordon Brown, is widely regarded as his likely successor. (Blair’s secret weapon)

Nevertheless, it was a historic victory for Blair and his party — the first time a Labour government has won three straight elections.

“I think we can be really proud of what we’ve achieved,” said Blair, who was greeted with cheers and applause by party staff and supporters when he arrived back in central London. “We’ve got a mandate to govern this country again,” added Blair, who celebrates his 52nd birthday Friday.

Turnout figures showed that only about 61 percent of people eligible to vote went to the polls — a 2 percent rise on the last general election.

CNN’s European Political Editor Robin Oakley said that there clearly was an “Iraq factor” in the results.

It appeared the voters had accepted Conservative leader Howard’s invitation to “wipe the smirk off Tony Blair’s face,” he said.

If the Labour majority falls to 64, as some are predicting, Oakley said that was “a danger area” for Blair, who has around 50 left-wing rebels in his party who may vote against his reformist program in parliament.

Chancellor of the Exchequer Brown was widely credited for the strong economy that helped seal the Labour victory, outweighing the bitterness many voters said they felt over Iraq.

Brown called the predicted Labour victory “historic.”

“This is the work that drives us on. This is the vision that gives enduring purpose to what we do. This is the task our party wants to take forward starting from this morning,” Brown said after winning a seat in his constituency.

Former prime minister Margaret Thatcher, a Conservative and the last prime minister to serve three terms, said of Blair: “I’m not quite sure of his place in history. History will determine that.”

French President Jacques Chirac was among world leaders sending their congratulations to Blair.

“I wish you every success in the pursuit of your important mission,” he said.

German Chancellor Gerhard Schroeder said: “I heartily congratulate you for your birthday and third straight election victory. I believe you’ve given yourself the greatest birthday present there is with your victory.”