This article critically evaluates New Labour's claim that it is pursuing a ‘Third Way’ foreign policy with specific reference to the issue of Third World debt relief. We discuss New Labour's efforts to pursue a Third Way foreign policy and describe the extent to which neoliberalism has become embedded in the global economy and in the strategies New Labour has adopted to alleviate the burden of debt. We analyse New Labour's efforts to reform the Heavily Indebted Poor Countries (HIPC) Debt Initiative and conclude that although New Labour has played an important role in establishing the eradication of poverty as a legitimate goal of foreign policy and secured the issue of debt relief on the G-8 agenda, their efforts remain embedded within a neoliberal approach. In practice, this is jeopardising the potential for genuine success.
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