ANGLO-AMERICAN POLITICS

When HILLARY CLINTON visited England in November, one of her meetings was kept private. Along with a delegation of top American officials, she spent a Saturday at Chequers, the country retreat of British Prime Ministers. Sitting around a conference table with TONY BLAIR and his political brain trust, they worked together on ways for "New Labour and New Democrats to develop policies in a complementary way that are a model for other center-left parties around the world," says Peter Mandelson, the media guru who has helped shape Blair's image.

The whole process began in April 1996 when Hillary met with Blair, then in opposition. After Blair was elected last May, Clinton adviser SIDNEY BLUMENTHAL started working with Mandelson and Blair's chief of staff, DAVID MILLIBAND, to set up a more formal connection. In addition to Clinton and Blumenthal, the Americans at Chequers included Housing Secretary ANDREW CUOMO, Budget Director Franklin Raines, Deputy Treasury Secretary LAWRENCE SUMMERS and Democratic Leadership Council president AL FROM. Besides Blair and Mandelson, the Brits included Chancellor of the Exchequer GORDON BROWN; Baroness MARGARET JAY, deputy leader of the House of Lords; and ANTHONY GIDDENS, the director of the London School of Economics. Hillary was a driving force. Says Mandelson: "She had a tremendous presence."

The central assumption was that both the Democrats and Labour must shed their image of big-spending liberalism. "Center-left parties today should be the parties of fiscal prudence," says Blair. Each side worked on ideas for welfare-to-work programs, tough anticrime measures, national standards for education and a commitment to free trade. They also discussed a philosophy of community that tempered the coldness of capitalism as well as the need to promote a civic society where individual rights carry social responsibilities. The alliance harks back to the conservative one shared by Margaret Thatcher and Ronald Reagan. But Clinton and Blair are personally closer. "For them it is a generational bond, having come to power in a postideological and post-cold war era," says a White House aide.