The show began with blinding flashes, heart-stopping thunder, sparks which had been palaces and hovels soaring up to decorate the night sky. The Shock and Awe military tattoo had started. It was only a few weeks until its climax as the great black evil one, suddenly floodlit, bowed to the crowd and fell slowly forward on his face.

Author, director! In flier's kit, backed by a chorus line of cute American sailors, the boss advanced downstage to harvest the cheers. "Mission accomplished!" But the noise was not all applause and was not coming from the audience and seemed, improperly, to persist. Something was wrong. Would the audience please remain in their seats until a technical problem with the exit was sorted? We are still there.

What have we done to Iraq? Until we are allowed to escape from the arena, it is impossible to look back and guess. What has Iraq done to us? Here it is easier to study the damage. The fearful act of 9/11, the utter success with which that spear of hatred pierced America's heart, left the United States a smaller country. But by joining in the retaliations for that act, Britain also became smaller. "Britishness", supposed to be a brand or a list of values, was already in a poor state. Iraq - and Afghanistan - diminished the probity and reliability of the United Kingdom in almost all its overseas dealings. In European but also Atlantic affairs, the UK has become a slighter, less interesting partner in the past five years.

At home, if that's the right term for a house that has become so draughty and noisy, democracy has diminished. In the vapid lists of "British values" served up by the Prime Minister and his supporters, "fair play" always recurs. It is not fair for civilians in Peterborough to abuse RAF men and women in uniform because of Iraq and Afghanistan. But the government has not played fair with the public, or even with the politicians, over those wars. The citizens are aware that they have been lied to and misled, that the independence of the British state has been rendered hollow, that control of the executive through parliament has become an old bedtime story told to make them close their eyes, that the five-year narrative of British military success in those two countries - still ela borated every day in the media - is no more than propaganda to conceal long-term mission failure, that a people can march in millions and be ignored.

All Blair's fault? All caused by what John Major's election team used to call the "Tango Bravo Factor"? Not entirely. Every one of these offences originated before 2003, some in new Labour's handling of power from 1997 onwards and others inherent in Britain's archaic institutions. The importance of Iraq was that it violently accelerated democratic decay and linked it to a short-term crisis in government ethics. People felt the jar of wheels falling off and asked: "Why are we being lied to?" Then they asked: "Who will tell us the truth about these wars and speak for us?" It's wrong to say that nobody did. At different moments, individuals such as Sir Menzies Campbell, Robin Cook or George Galloway spoke truth both to power and to the people. But none of them was able to wipe away the sense of national and personal humiliation that Iraq has left behind. Too many big men and women, who could and should have spoken out too, kept silent.

So Britain is smaller abroad. For the first time (as many commentators have pointed out), Britain abandoned its balance-of-power tradition and identified completely with the foreign policy of a stronger state. The UK was not the victim of 9/11 and had no direct motive for armed conflict with al-Qaeda or the Taliban, let alone with Saddam Hussein. The decision to go along with American retaliation through regime change did not defend British interests in the region but sacrificed them.

Sir Geoffrey Howe, speaking a few days after 9/11, listed four conditions that could justify American military action. These were that the action should be deterrent or self- defensive and not retaliatory, that there should be hard evidence of the target's responsibility for the 2001 atrocity, that long-term international support could be guaranteed and that any attack should be accompanied by a new effort to solve the Palestine question. None was fulfilled. Blair did attempt to link a token Middle East initiative to his support for Bush over Iraq, but it was never - could never have been - taken seriously by either Israel or the United States.

In spite of these omens, Tony Blair took Britain to war. His rhetoric changed from "humanitarian rescue" to "the defence of civilisation and civilised values". Many voices, from foreign statesmen to our own Foreign Office, tried to warn him that George W Bush and the neocons were an entirely new species of American leadership. It would be a fatal mistake to think he could steer and persuade them, as he had persuaded Bill Clinton and his White House over Kosovo in 1999.

Uncritical loyalty

Blair ignored them. The statesmen shrugged. The Foreign Office put its face in its hands, suddenly feeling very old. For 50 years, British diplomats had acted as the rearguard, preventing Britain's long retreat from power from turning into a rout. Now this! In the years that followed, the FO watched Blair govern from a sofa; few if any of its careful, brilliant position papers reached him or his inner circle. The vital connections between a prime minister and the "great offices of state" - Foreign Office, Home Office, Treasury - fell into neglect.

What has Britain got out of the Iraq War? Uncritical loyalty is always abused. The June 2003 extradition agreement deman ded by the US is a horrifying abdication of legal self-respect. Perhaps the most shaming, revealing moment came when Donald Rumsfeld placed his tactless call to London on the eve of war, suggesting that British troops were not really needed for the fighting and that if Blair was under pressure at home, they could restrict themselves to rear-area guard duties. But the British did fight, and Britain's reward has been to be loathed and dismissed throughout the Muslim world as America's poodle, to suffer a small but very painful Islamic terror campaign at home, and to lose credibility in Europe. It is noticeable, for example, that Angela Merkel and Nicolas Sarkozy are now given much warmer welcomes in Washington than British visitors; German and French opposition to the Iraq War in 2003 turns out to have cost them nothing in American attention. (One of the most stubborn British myths is that the Americans want the UK to remain semi-detached from Europe, loyally preventing the formation of a rival superstate. On the contrary, the Americans have always wanted Britain to get closer in there, and they long for a coherent EU with a single voice.)

So the wars in Iraq and Afghanistan have left the relationship less "special" than ever. Britain is weaker and more suspect in the world, and therefore less useful to American policies. Even the promised Trident warheads, token of renewed British nuclear dependence, are held up because the Americans have apparently used the wrong detergent to clean them up. Meanwhile, British forces have retreated into Basra airbase - the longest wait for a return flight in history - and in Afghanistan they do their best in a pointless war that everyone knows will be settled by a deal between the Pashtun and the other warlords.

How about the impact of the Iraq War on Britain itself? More accurately, how has this highly unpopular war affected the political climate, especially on the left? Organised pro-test against wars, especially expeditionary ones, has a long history in Britain. None of those movements succeeded, and yet the legacy of the protest has sometimes been as potent as that of the war itself. The "pro-Boer" campaigns against the South African war were a nursery for radical Liberal and socialist policies in the next generation. The "Law Not War" protest against the Suez invasion in 1956 abruptly ended the innocence of the postwar young, who had not imagined that the police could club women or that a British government could use criminal deceit to invade another nation. The Vietnam demonstrations were an induction into the social critique of the 1960s, even if the marchers learned little about Vietnam.

But "Not in My Name" was not the same as "Law Not War". To start with, these demonstrations were far bigger. They were also peaceful, marches of the non-marchers, whereas the Suez crowds tried to storm Downing Street and fought the police. Last, but very important, the Iraq protest had almost no articulation within parliamentary democracy. In 1956, the main opposition party - Labour, headed by Hugh Gait skell and Aneurin Bevan - used the whole labour movement infrastructure to pull people out on to the streets. In 2003, the Tories completely failed to recognise that the Iraq War was not a matter of "supporting our boys", but a menace to international order and a threat to their vision of Great Britain as a sovereign and independent state. A few - Malcolm Rifkind and Geoffrey Howe among them - saw what was at stake. But by refusing to support the Liberal Democrats and Labour rebels against the war, let alone to endorse the sea of outraged citizens with banners, the Conservatives betrayed their principles and, perhaps, their country.

Hate figures

War, which had rescued Margaret Thatcher's popularity in 1982, did the opposite for new Labour. Tony Blair became a hate figure in the same working-class parts of the United Kingdom that had once anchored their politics on hatred of Thatcher. But his grand "modernisation" project has driven ahead apparently undeterred; under Brown as under Blair as under Thatcher and Major, public services continue to be devolved to private speculators in spite of an accumulating pile of failures. New Labour's migration to the right leaves formations like the Scottish National Party commanding the social-democratic heights. At the 2005 elections, this convergence with the Tories made Tony Benn write in his diaries that "it's like three managing directors competing for the job of running Tesco's".

Has the war hastened the process? New Labour operates within exactly the same dialectic as Thatcher's governments did: as the state retreats from public service, so it advances its powers of social control. More "freedom of choice" for the consumer turns out to mean less freedom for the citizen. Fewer subsidies means more policemen. The Iraq War tempted the Blair governments and especially their home secretaries to snatch up the "war on terror" fantasy and use it to justify one repressive measure after another: extended detention without trial, new powers to search, bug and deport, the national identity database scheme, the crackdowns on asylum-seekers and immigrants, and all the other threatened or real erosions of civil liberty.

No wonder Baroness Thatcher said that new Labour was her greatest achievement. No wonder Tony Benn, looking back at the long disaster of the Iraq War, observes that, for the first time ever, the public has ended up to the left of a Labour government. Could this be the same party that, within months of winning power back in 1997, boldly handed over so much of the central state's authority to Scotland and Wales?

The outlook, after five years of war in Iraq and seven in Afghanistan, is dingy. Gordon Brown has missed the un repeatable opportunity for a new prime minister to de-nounce the war and promise "never again" for a slave rela tionship with an American president. Had he done so, he would have "spoken for Britain", transforming politics and his own prospects overnight. As it is, there are actually more Establishment voices in the US confessing that the Afghan and Iraq ventures are hopeless than there are in Britain. The longer we cling to false optimism, the harder it will be to extract ourselves from this mess.

And you happy, angry millions who flooded the streets five years ago - what do you feel now? "Not in My Name"? But a few days later it was done in your name, in spite of your passion. Blair pretended to take no notice; the next election did not throw him out; the killing has not stopped.

Does that mean that it's time to shrug and move on, that all passion against unjust war is futile? I don't think so. Demonstrations frighten governments more than they admit. Those who take part in them are changed, remembering a sense of strength that can last a lifetime. Meanwhile, the world has not moved on, but continues to burn; the madmen on all sides do not shrug but are laying new plots. Marchers with a passion for justice will be needed again, perhaps sooner than we think.