A meeting with Sinn Fein, a speech to the European Union, the continuing debate over welfare reform and a reported rift with his Chancellor. The BBC's Political Editor, Robin Oakley, looks at the week ahead for Tony Blair.

The first full week back at Westminster seems likely to be a busy one for the Prime Minister. Tony Blair is due to make a major speech in Holland on Tuesday, setting out his government's thinking on the European Union in the early stages of the British Presidency.

On Monday, he is due to meet Sinn Fein leaders for a second time in Downing Street to discuss Sinn Fein's objections to the Anglo-Irish proposals for a settlement in Northern Ireland. The Government is also expected this week to make a new move in the Ulster peace process by apologising for Bloody Sunday, when 13 nationalist civil rights marchers were shot dead by the Parachute Regiment on January 30 1972.

Attention will continue to focus on the government's plans for reform of the Welfare State as MPs digest the Prime Minister's Dudley speech and the battery of supporting statistics ministers have produced. And there is likely to be further speculation about the relationship between Mr Blair and the Chancellor of the Exchequer, Gordon Brown. This follows Number Ten's irritation over a biography of the Chancellor which reveals Mr Brown's continuing bitterness over the 1994 Labour leadership contest. Mr Brown did not run in the election in order to allow Mr Blair a clear run.

Bloody Sunday

In what will be seen as a move designed to please the nationalist parties and the Dublin government, and to counter what is seen by them as the pro-Unionist tenor of the latest power-sharing proposals, the Prime Minister is expected both to make an apology for the 1972 shootings and to appoint a senior legal figure to conduct a review of the evidence.

But the Ministry of Defence is believed to have won the argument against setting up a full judicial inquiry. Mr Blair has had some such action in mind for a long time but ministers have been nervous of an expected Unionist backlash.

There was a tribunal of inquiry into the Bloody Sunday killings under Lord Justice Widgery soon after the event but its findings that the soldiers were fired on first and that they acted in self defence were greeted with derision by the nationalist community.

Five years ago John Major wrote to John Hume, the SDLP leader, saying that those killed should be regarded as "innocent of any allegation that they were shot while handling firearms or explosives". Last year the Irish Government produced material which has been studied by Mo Mowlam and the Northern Ireland Office.

Blair in Europe

The Prime Minister has long indicated that employment issues will be his chief concern during Britain's occupancy of the EU Presidency for the next six months.

He promised Japanese businessmen in Tokyo that Britain would be an "honest broker" doing its best to see that the single European currency is successfully launched despite his government's refusal to join in the first wave. He is a keen proponent of completing the Single European Market and of enlargement of the EU.

However, Mr Blair needs to counter Continental irritation at his talk of Britain "leading in Europe" when his government is opting out of Europe's biggest single current project and he needs to spell out in more detail British aims on such questions as the reform of the Common Agricultural Policy. The speech is to set out his reform agenda for Europe and is expected to refer to a cross-party alliance in Britain on matters European.

Welfare Reform

In his Dudley speech the Prime Minister effectively began a public debate about the future shape of the Welfare State. But he did not set out solutions.

His involvement in a kind of revival of his party crusade to reform Clause Four is a tacit admission that the welfare reform programme has got off on the wrong foot, with the emphasis on the lopping of benefits.

This has naturally created fears. With 75% of the households in Britain in receipt of one benefit or another, and with the government talking of it taking two or three Parliaments to reform the pensions system, there is likely to be much public anxiety until the detail of the government's proposals becomes known.

The case for reform

The facts belatedly produced by the government to help support Mr Blair's speech certainly make a strong case for reform. In 1949 13p of every pound spent by the government went on Social Security, now it is 30p in every pound. The Beveridge Social Security system cost £12 billion a year at today's prices in 1949, now it is eight times as much at around £100 billion.

In 1950 spending on social security was 5% of Britain's GDP. Now it is 13%. Between 1979 and 1996 the bill for social security rose by £43 billion a year. The benefits bill amounts to £80 per week for every family in the country. Welfare costs more than health, education and the police combined.

And yet many aspects of the Welfare State are failing to provide help where it is most needed. Four million children live in poverty. One in five households has no-one working. The poorest 20% in society get a lower share of the benefits expenditure than they did in 1979. A million pensioners don't get the income support to which they are entitled. And benefit fraud, at £4 billion every year according to the Prime Minister, is enough to finance the building of 100 hospitals.

Why is it so much more expensive?

Demographic factors come into play: In 1949 there were four million people receiving retirement pensions, now there are 11 million. New benefits, like housing benefit, have been introduced. In the case of child benefit a social security payment replaced a tax allowance. Disability benefits have been growing at 14% a year. And there have been real terms increases in many benefits.

What is the government's strategy?

It is essentially one of "Welfare into work". The aim is to break the vicious circle of welfare dependency by getting more people off benefit and into work, via the "Welfare into work" programme. This is to be financed by the windfall tax on utilities, by funding more childcare to help single parents get jobs and by producing a better educated, better skilled workforce.

Thought is also being given to better targeting of welfare benefits - hence the talk of "affluence tests" to exclude the better off from receipt of some - and to more compulsory self-provision in areas like pensions.

The basic principles boil down to: directing help where it is most needed, getting the maximum number into work, individuals providing for themselves where they can and minimising fraud in the system.

What are the next practical steps?

A new ministerial working group starts this week, led not by Gordon Brown but by the Prime Minister himself. A Green Paper on the basic principles of reform, masterminded by Frank Field, is due in February.

Separately, the Department of Social Security is conducting a review of disability benefits and a banker, Martin Taylor, is conducting a long-term review of the tax and benefits system, which could eventually see a merger. In addition the Chancellor is working on his March Budget, which could see moves to scrap child benefit for 16-18 year-olds in full-time education and to pay benefits to the low paid through their pay packets rather than via the social security system.

It is all very piecemeal and offers scope for the opposition to run scare stories as Labour did when the Tories produced their pension reform proposals during the election. William Hague is predicting this will be "Labour's Vietnam" while offering general support for reform on the right principles. What is clear is that Mr Blair faces the biggest opposition to his plans from within Labour's own ranks.

Blair and Brown

There is deep irritation in Number Ten at the degree of co-operation Gordon Brown and his allies gave to the Paul Routledge biography of the Chancellor, which has revived the bitterness over the Labour leadership contest. Brown is felt to have been unwise to let his grudges show.

The relationship between Prime Minister and Chancellor is crucial to any government as the tensions between Margaret Thatcher and Nigel Lawson showed. It is even more so in this government where Gordon Brown has been allowed a free rein on policy while Mr Blair has concentrated on the "Big Picture".

The fact that the Prime Minister has taken control of the welfare policy group rather than leaving it to Mr Brown is an indication of some tension. The two men have long been close allies and retain a tactical partnership. They still discuss much together but those close to them say that the relationship is now much less close and more strictly policy-oriented.

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