It will be remembered throughout the world for the death of Diana, Princess of Wales, and the week-long period of mourning that followed.

In Britain, the huge outpouring of grief prompted a re-evaluation of the monarchy, the role of the press and of the sensitivity of the population as a whole.

The trial of Louise Woodward, the teenage nanny accused of murdering an eight-month-old baby in the United States, led to a similar display of public emotion, some months later.

New Labour

Britain's political landscape changed beyond all recognition on May 1, with the landslide victory of Tony Blair's Labour Party in the General Election.

Many heavyweight Conservatives lost their seats as "sleaze" and divisions over Europe took their toll, and even the crowning of a new leader in William Hague has so far failed to improve the Tories' fortunes.

The new government continued the pursuit of peace in Northern Ireland. On July 19, the IRA declared a ceasefire and was invited to join all party talks at Stormont and later, to visit Number 10 Downing Street.

Political "sleaze" refused to lie down and the Labour Party found itself in hot water over the exemption of Formula One motor racing from a ban on tobacco sponsorship and the subsequent discovery that motor racing boss Bernie Ecclestone had donated £1m to the party. The money was later returned to Mr Ecclestone.

Overseas

Two long-running disputes flared up again in 1997. The violence in Algeria became as ferocious as ever and Iraqi President Saddam Hussein continued to defy the West - by kicking American weapons inspectors out of the country.

July 1 was an historic day for Britain as Hong Kong was handed back to the Chinese. The territory was one of the last significant remnants of the British Empire.

There were fears in the colony's financial community that the advent of Communist rule would signal the end of its profits. But the world's markets were shaken much more by turbulence in the capitalist "tiger" economies.

The region also added to the world's environmental fears as forest fires in Indonesia caused vast swathes of smog.

Entertainment

A British film about five unemployed Sheffield men who turn to stripping rocked the box offices, the Spice Girls' star wavered and the Teletubbies ruled the airwaves.

In sport, England and Scotland qualified for football's World Cup, Greg Rusedski shot up the tennis rankings, Jacques Villeneuve survived a Schumacher shunt, the Aussies proved they are still the best at Test cricket and the All Blacks remained top of the rugby union world.
 

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