"It has [been a disaster] but, you see, what I say to people is: 'Why is it difficult in Iraq?' It's not difficult because of some accident in planning, it's difficult because there's a deliberate strategy - al-Qaeda with Sunni insurgents on one hand, Iranian-backed elements with Shia militias on the other - to create a situation in which the will of the majority for peace is displaced by the will of the minority for war."

It's not easy to deconstruct this statement. It seems to say: "It's not our fault. Our plan was excellent. It's just that the bad guys didn't do the right thing - it's so unfair."

Note also his difficulty with the word "disaster" - in his mind, Iraq is "difficult". And note too that Blair doesn't tell Frost what he actually believes, only what he says to people.

It is all frighteningly reminiscent of David Runciman's suggestion (in his book The Politics of Good Intentions) that the true meaning of Blair's words is: "You can't blame us because we meant well."

Close observers of the Prime Minister are puzzled about the depth of his resilience. The worse things get, the deeper into the political mire he sinks over Bush and Iraq and the key elements of his domestic reform program, the bouncier he seems. He now resembles the baby which has just fallen out of a tower block into the only soft landing around; everybody else is frantic but the mite gurgles happily away quite unknowing.

A few months ago, Blair's closest friend - the former premier of Western Australia, Geoff Gallop - suddenly withdrew from politics, citing clinical depression. It seems that as Gallop descended into depression, Blair was going the other way. Gallop dealt with the problem in exactly the right way - attending to it with professional support and emerging strengthened in a new and very important academic role as the head of the School of Government at the University of Sydney. Blair appears to be stuck in a manic state.

Blair has worried some observers before. As long ago as March 2003, the distinguished former politician Matthew Parris wrote an astonishing piece for The Times entitled: "Are we witnessing the madness of Tony Blair?"

In it, he drew attention to the "fierce intensity" of Blair's self-belief and to his wild optimism and grandiosity, quite out of step with messy reality. He also, in passing, linked this messianic quality with the Prime Minister's well-known religiosity. Alistair Campbell, then Blair's press secretary, always insisted "We don't do religion!" But the press corps knew better.

In 1996, the veteran Labour MP Leo Abse wrote an account of his first dealings in 1984 with the ambitious young member for Sedgefield. Blair had been asked to join the committee working on the Matrimonial and Family Proceedings Bill.

Throughout the committee's proceedings, Blair exasperated its other members by his inability to confront the messy realities of damage limitation when a marriage has broken down, insisting that "marriage should be viewed as a common endeavour, in a broader sense, as opposed simply to pounds, shillings and pence". He abhorred the principle of the "clean break", preferring high-sounding and hopeful platitudes.

Those who work with Blair refer to his frequent rumination "it's all very difficult!" - which they take to mean "we don't do difficult". So Parris's observation that Blair prefers a kind of vague but well-meaning optimism to admitting to and grappling with failure, is supported by Abse's experience nearly 20 years earlier. He observes that Blair's rhetoric is of "trust and honour; of compassion, conviction, vocation; of humanity, integrity, community, morality, honesty and probity; of values, standards, faiths and beliefs". He is a politician but he aspires to be more than that.

Sir Christopher Meyer, the British ambassador in Washington during the Iraq build-up, reminds us in his book DC Confidential that Blair doesn't "do" detail either.

Abse, apart from his distinguished 30-year career as a parliamentarian, is something of an expert in psychology, especially where the irrational peculiarities of politicians interfere with their work in the rational world. In 1989 he wrote a "psychobiography" of Margaret Thatcher, Margaret - Daughter of Beatrice, in which he attempted to demonstrate how the bleak circumstances of her early family life left her with deep psychological scars which were subsequently visited, he argued, on the people of Britain. Famously, she boasted she never spoke to her mother after the age of 15. However, she included a loving reference to her mother in her Who's Who entry after this oddity was pointed out by Abse.

What should exercise the minds of the Labour Party in Britain is the striking resemblance between Thatcher's and Blair's family origins. Alderman Alfred Roberts (Thatcher's revered father) was a fairly standard small businessman local Tory politician in Lincolnshire. But Leo Blair (the father of the PM) morphed from young communist to high Tory in his quest for social advancement after the war. If he had not been cruelly struck down by a stroke at 40, he, as chairman of the Durham Conservative Association, would likely have become the next Tory MP for Hexham.

Abse's suggestion is that, the Tory origins apart, both politicians were formed by psychologically bleak family circumstances (including plain bad luck in Blair's case), leaving them with strong narcissistic tendencies, a nagging sense of social exclusion, an abhorrence of compromise and, crucially, an inability to take in bad or contrary news. This rendered them both unusually resilient, otherwise a boon to a politician, but likely to drift away from inconvenient reality. The difference is that Blair yearns for a conflict-free form of politics; Thatcher became addicted to conflict. Thatcher actively plotted to subvert the leadership chances of her most able lieutenants when she fell from power. By then the most important thing for her had become not the continued welfare of the party, but the preservation of her personal "legacy". Watch out British Labour now.

If politicians are unusually subject to feelings of social exclusion, this may explain Blair's often stated affection for Australia and Australians. After all, he spent his earliest years in Adelaide in the happiest of circumstances. When he returned to the cold and dank north of England, he became an unhappy loner at the Durham Cathedral Choristers' Preparatory School, often ferried to and fro by his stern father. It was the same at Fettes, the starchy public school he attended in Scotland. He ran away from Fettes. At Oxford he said he "never really belonged" and "always felt like an outsider". It's no surprise that he fell in with the brilliant Rhodes Scholar Gallop and the charismatic Australian clergyman Peter Thomson. For the first time in his life he had found a congenial psychological "home" - in the spiritual and political beliefs of two Australians.

If it is true that prominent politicians are often impelled to act out private grief in their public lives, this may explain their frequent recourse to bizarre or self-destructive behaviour. In retrospect, Blair's personal decision to take Britain into Iraq seems to verge on the suicidal, politically speaking. But perhaps the need for approval and acceptance by a powerful father figure swamped all other considerations. Once that decision was taken, in opposition to all the most expert advice, the Prime Minister was launched on a sea of "bullshit". But not lying - his moral code will not condone a deliberate lie. What's the difference?

Professor Harry Frankfurt, the eminent Princeton philosopher, explains the distinction between lying (the deliberate attempt to deceive) and bullshitting (which the bullshitter is likely to believe - and which may well be true). The point of bullshit (as Frankfurt explains in his important monograph On Bullshit) is not concerned with truth or falsehood but with the carrying forward of an impression which supports a general thesis about the world at large and especially about the "bullshit artist" himself. The admirable thing about the liar is that he has a kind of respect for the truth, because he must apprehend it in order to contradict it. For the bullshit artist, truth is an irrelevance.

So when politicians tell untruths they are frequently expressing a deeper truth which is embedded in their wounded self-view. And of course the fact that both Blair and Bush are religious means that they are both capable of faith in the undemonstrable. Bush is also probably quite sincere in what he says - Frankfurt might argue that his particular line of bullshit serves the underlying purpose of demonstrating to an extended, and sceptical, Bush family, that he is not a stupid failure burdened by an addictive personality after all. So, terrifying as it may seem, he probably believes every word he says. The US Vice-President is another matter.

So, are we just unlucky to have two important political systems led by people damaged in this way? Not really. The point is that people like Blair and Bush are impelled to strive for the top and, given a surface plausibility and unlimited self-belief, often achieve it. Never forget the wise words of the great 17th-century French essayist Jean de la Bruyere: "Men fall from great fortune because of the same shortcomings that led to their rise."

On the last day of the Scottish Labour Party conference dominated by "Natbashing", Labour's big-hitter was brought in to try to deliver the killer blow.

Launching a vicious attack, Mr Reid accused the Nationalists of a "wrecking agenda" which would rip families apart, leave Scotland economically unstable and undermine national security.

Labour has been put on the defensive by polls showing it is trailing the SNP. The Oban conference marked the start of a fightback ahead of the Scottish parliament election in May.

Last Friday, Tony Blair set out a measured argument against independence, while Jack McConnell urged delegates to support education with Labour rather than separation with the SNP. But it was Mr Reid who went for the jugular.

As a stalwart of the Labour Party, the MP for Hamilton North and Bellshill said:

"When I hear the polls and the pollsters and the pundits tell us there is an unstoppable, inexorable march to independence, I have heard it all before. It will not demoralise us, it will spur us to greater activity."

He accused the SNP of allowing the Tories to get into office for 20 years then blaming all of Scotland's problems on the Union while refusing to back devolution until the last minute.

Referring to Alex Salmond, the leader of the SNP, and his departure from Holyrood to Westminster, Mr Reid said: "He didn't fight for the [Scottish] parliament. He didn't stay with the parliament. But now it's up and running he would like to run the parliament. Dream on."

Mr Reid said independence would effect some of the two million Scots with relatives living across the Border.

"Separation would mean hundreds of thousands of children and grandchildren, parents and grandparents, overnight becoming 'English' or 'Scottish', but not British, being forced to choose which passports to hold."

And, referring to his widely anticipated leadership bid against Gordon Brown, Mr Reid joked: "Almost one million of us Scots live and work in England - in all walks of life, up to and including the Prime Minister. And I am told the next Prime Minister might be a Scot as well."

Later, Mr Reid was given the opportunity to rule himself out of the fight for the leadership, but once again refused to do so.

He also accused the SNP of being unable to face "the challenges of the coming decade" such as the environment, organised crime, international terrorism and mass migration.

"These are the great new issues of our age in front of which narrow nationalism stands helpless," he said. "These challenges just can't be tackled by border guards at Gretna Green.

"The environment does not respect borders. Organised crime won't stop at Carlisle. Illegal immigrants will not be daunted by the River Tweed. And terrorists who refuse to distinguish between civilians and combatants aren't going to make any difference between the Scots and the English."

But Angus Robertson, the SNP's spokesman on foreign affairs, said Scotland would be safer removed from the foreign policy of a Labour government.

A CTC spokeswoman said: "The CTC is working closely with Vigil and in particular its director and spokesman who has made officers aware of chatroom material," she said.

One member of Vigil is credited with helping bring about the conviction of cleric Hamza, jailed in London in February for inciting racial hatred and soliciting murder, and wanted in the US on terrorism charges.

Glen Jenvey said he tricked Hamza into handing over videos and audio tapes which were used by US authorities in their case against James Ujaama, who pleaded guilty in 2004 to trying to help al-Qaeda militants.

Mr Jenvey's latest work has involved another hardline Muslim cleric, Omar Bakri Mohammed, banned from Britain in August as part of a crackdown on so-called "preachers of hate".

The revelation that Bakri had been delivering nightly sermons via an internet chatroom from his exile in Lebanon was reported by the BBC this week.

"When you listen to a whole lecture ... he's inciting terrorism, and supporting terrorism," Mr Jenvey said.

Anjem Choudary, a close friend of Bakri, denied there was anything sinister about the sermons and said the talks in "no way encourage or incite" British Muslims.

Mr Whiteman said a very trusted contact who had a "key security role in the UK" had revealed that 70 per cent of information given in a daily briefing to the US president, George Bush, by the intelligence chief John Negroponte centred on the British capital.

Vigil has now turned its sights on two groups prominent in Britain: Tablighi Jamaat, a missionary organisation that is planning to build Britain's largest mosque in east London, and Hizb ut-Tahrir (HT), an organisation Britain announced it would ban after the 7 July , 2005 London bomb attacks.

Both groups say they do not have links to militants and that they promote peace.

"We wanted to find out more," Mr Whiteman said, adding that his group had infiltrated the organisations. "There's nothing to suggest they will be banned, but there are definitely a few rotten apples that need to be looked at."

The interest in the equipment comes amid growing concern that Britain is becoming a "surveillance society". It was recently highlighted that there are more than 4.2m CCTV cameras, with the average person being filmed more than 300 times a day. The addition of microphones would take surveillance into uncharted territory.

The Association of Chief Police Officers has warned that a full public debate over the microphones' impact on privacy will be needed before they can be introduced.

The equipment can pick up aggressive tones on the basis of 12 factors, including decibel level, pitch and the speed at which words are spoken. Background noise is filtered out, enabling the camera to focus on specific conversations in public places.

If the aggressive behaviour continues, police can intervene before an incident escalates. Privacy laws in Holland limit the recording of sound to short bursts. Derek van der Vorst, director of Sound Intelligence, the company that created the technology, said: "It is technically capable of being live 24 hours a day and recording 24 hours a day. It really depends on the privacy laws in a particular country."

Last month Martin Nanninga of VCS Observation, the Dutch company marketing the technology, gave a presentation to officials from Transport for London, the Metropolitan police and the City of London police about the CCTV system. Nanninga is to return next year for further discussions.

"There was a lot of interest in our system, especially with security concerns about the Olympic Games in 2012. We told them about both our intelligent control room and the aggression detection system," Nanninga said.

In Holland more than 300 of the cameras have been fitted in Groningen, Utrecht and Rotterdam. Locations include city centres, benefit offices, jails, and even T-Mobile shops. The sensitivity of the microphones is adjusted to suit the situation.

Police and local council officials are still assessing their impact on crime, although in an initial six-week trial in Groningen last year the cameras raised 70 genuine alarms, resulting in four arrests.

Harry Hoetjer, head of surveillance at Groningen police headquarters, recalled an incident where the camera had homed in on a gang of four men who were about to attack a passer-by. "We would not normally have detected it as there was no camera directly viewing it," he said.

Last Friday a Sunday Times reporter visited the office of Sound Intelligence in Groningen to test the system. The reporter stood in the control centre with a view of an empty room on one of a bank of monitors. Van der Vorst entered the room, out of sight of the camera, and began making aggressive noises.

The camera swivelled to film him and an alarm went off in the control room, designed to alert police to a possible incident. "The cameras work on the principle that in an aggressive situation the pitch goes up and the words are spoken faster," said van der Vorst. "The voice is not the normal flat tone, but vibrates. It is these subtle changes that our audio cameras can pick up on."

Public prosecution services can use them in court as evidence. The Dutch privacy board has already given its approval to the system.

According to a spokesman for Richard Thomas, Britain's information commissioner, sound recorded by the cameras would be treated under British law in the same way as CCTV footage. Under the commissioner's code of practice, audio can be recorded for the detection, prevention of crime and apprehension and prosecution of offenders. It cannot be used for recording private conversations.

Graeme Gerrard, chairman of the chief police officers' video and CCTV working group, said: "In the UK this is a new step. Clearly there is somebody or something monitoring people speaking in the street, and before we were to engage in that technology there would be a number of legal obstacles.

"We would need to have a debate as to whether or not this is something the public think would be a reasonable use of the technology. The other issue is around the capacity of the police service to deal with this."