Anthony Giddens is on the offensive against critics of the third-way political theory espoused by new Labour, armed with research that undermines traditional concepts of poverty.

Professor Giddens, director of the London School of Economics, is preparing a book, to be published early next year, to answer critics both left and right of the theory.

The book will be welcomed by the government because third-way thinking, all part of a larger "Blairism", appears to be losing ground among left-of-centre parties in Europe. German chancellor Gerhard Schroder, who signed a joint third-way strategy paper with Tony Blair in June this year, has been hit by local election defeats, which critics blame on the unpopularity of an imported and ill-defined political approach. In France, prime minister Lionel Jospin has all but rejected the third way in favour of more traditional left-wing politics. Spain is also sceptical.

But Professor Giddens, new Labour's third-way guru, is fighting back. He believes that the latest sociological research in Britain, Germany and the United States challenges traditional socialist and social democratic policy.

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The research focuses on poverty and raises questions about traditional left of-centre responses to it and the associated social problems. Professor Giddens said the research underlines not just the importance of the third way, but the absolute necessity of it.

Professor Giddens draws on work by researchers such as American David Ellwood, the LSE's John Hills and Germans Lutz Leisering and Stefan Leibfried, who have all examined the nature of poverty.

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He said that their work reveals that poverty is so differentiated that it is difficult to talk about "the poor". "Research in Germany, over ten years from 1984 to 1994, showed that 30 per cent of the population was classified as being poor. But it also showed that far more people escape from poverty than in the past. "The proportion living in enduring poverty is quite small - probably some 5 per cent of the population," Professor Giddens said.

The studies also show that people's routes into poverty are enormously varied.

It is not simply that they are born into and stay members of an immutable underclass, or that their experiences while poor will be the same. Even if a person is in poverty - and therefore economically unequal - they may be educationally more equal and will probably enjoy greater sexual equality.

The implications for traditional politics are clear to Professor Giddens. "The left has regarded the poor as victims, but if we look at how people react to their lives, most react actively. The welfare state is a massive presence in people's lives. I am arguing for well-funded welfare, but also a welfare system that addresses the needs of people ... not one that creates dependencies," he said.

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"Socialism is dead as an economic doctrine. So what we must do is create a more humane capitalist society that continues the values of the left - equality, solidarity, protection of the weak - and that recognises the role of active government in achieving this.

"The third way is just a name for the debate about how to revise socialist policies. My argument is that only a third-way revisionist approach to left wing politics can cope with inequalities."

Professor Giddens said most people do not appreciate the pace of technological change and how it is affecting every aspect of our lives. New technology is integral to the modern human experience: it determines not only how we work but what we do in our leisure time, what we eat and may even, one day soon, determine our genetic construction. Barring catastrophy, this influence can only continue to grow.

"Socialist state control is out the window and we cannot leave control to the markets. We need a balance among three institutions: the market, government and civil society. If any one is stronger [than the others] it cannot work," he said.

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"To be a radical does not mean sticking with established doctrines of the left, but breaking with, them. It means breaking with the established doctrines of the unbelievable right. That is obviously controversial."

For Giddens, third-way radicalism is not just an academic exercise. There is a lot at stake, he said. "If we fail to take on the challenge, then social problems will get worse."

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