London ? The Bush administration is laying the groundwork for Tony Blair to be a special Middle East envoy for Palestinian governance and economic issues after he steps down as Britain’s prime minister.

Blair would report to the so-called Quartet overseeing Middle East peace efforts – the United States, the United Nations, the European Union and Russia – and focus on issues limited to the internal workings of a future Palestinian state. The job would not involve political negotiations involving Palestinians, Israelis and the Arab state.

The idea was embraced by the Israeli government during talks between President Bush and Prime Minister Ehud Olmert this week.

The Palestinians have yet to be approached on the possibility, but U.S. officials believe they would welcome a Blair appointment.

British officials said talk of an appointment was speculative at this stage. “There is a lot of speculation about what the prime minister will do after June 27 and we’re simply not commenting on any of it,” a senior British diplomat said.