(Updates with Blair quotes)
By Sophie Walker
LONDON, June 27 (Reuters) - Britain enters a new political era on Wednesday when Tony Blair steps down after a decade and Gordon Brown takes over as prime minister knowing he must heal wounds in the country caused by the Iraq war.
After waiting 10 years for Blair to go, Brown must contend with a resurgent opposition Conservative Party and give the ruling Labour Party a new start if it is to regain popularity among voters and win a fourth consecutive term.
Blair, Britain's second longest serving prime minister in the last century, went to Buckingham Palace to tender his resignation to Queen Elizabeth.
Brown, finance minister throughout Blair's premiership, was due to make the same journey soon afterwards where the queen will ask him to form a government.
Brown will then begin appointing a new ministerial team, expected to be completed on Thursday.
Blair led Labour to an unprecedented three consecutive election wins, but, for many Britons, his legacy has been tarnished by his decision to back the U.S.-led war in Iraq.
"The first priority of Gordon Brown has to be recognising the disaster of the strategy in Iraq and making plans for the withdrawal of our forces," said Labour member of parliament Jeremy Corbyn, a critic of Blair and the Iraq war.
Blair continued to steal the spotlight with reports he was about to be named Middle East envoy for the United States, Russia, the European Union and the United Nations.
Before going to the palace, Blair answered questions in a packed parliament for the last time, displaying his mastery of debating skills in a session marked by humour and emotion.
SORRY ABOUT DANGERS
Blair began by offering condolences to British servicemen killed in Iraq and Afghanistan in the last week and paid tribute to the armed forces.
"I am truly sorry about the dangers that they face today in Iraq and Afghanistan. I know some may think that they face these dangers in vain. I don't and I never will," he said.
He finished with a final word on politics: "It is still the arena that sets the heart beating a little faster" before signing off simply with: "I wish everyone -- friend or foe -- well. And that is that. The end."
Brown received a boost from an opinion poll that put Labour just one percentage point behind the Conservatives and from the defection to Labour of a Conservative parliamentarian who slammed David Cameron's leadership of the main opposition.
The Conservatives have surged ahead of Labour in polls since last October. Brown does not have to call another election until 2010.
Brown has vowed to revitalise Labour and learn from what he called the divisive Iraq war, although he still backs the decision to join the 2003 U.S.-led invasion and has said British troops will abide by their United Nations' obligations in Iraq.
Other early challenges for the new leader include staving off demands for a referendum on a new European Union treaty, agreed in outline by Blair and other EU leaders last week.
But it is Britain's close relationship with the United States -- Blair was President George W. Bush's closest ally over Iraq -- that will dominate Brown's early agenda.
Bush paid tribute to Blair in an interview with Britain's biggest-selling daily tabloid, The Sun, describing him as a great ally and "a very talented man" and adding: "Tony has always been very gracious about Gordon Brown to me."
Many Labour legislators want Brown to distance himself from Washington and pursue a more independent foreign policy. (Additional reporting by Kate Kelland, Adrian Croft and Katherine Baldwin)