our years into his role as Bermuda's ultimate political arbiter, Governor Sir John Vereker is as upbeat as ever, despite the rising level of flak flying his way. Twice in the last few months prominent PLP politicians have demanded he be recalled, most recently when Senator David Burch attacked Sir John for allowing the Commanding Officer of the Bermuda Regiment to be chosen by a board headed by a civilian.

But for Sir John the radical rhetoric goes with the territory.

He said: "The Governor doesn't get engaged in street politics. We are, we should be, above it. I don't lose any sleep over it."

Some would have Government House closed down altogether under an independent Bermuda but there is no consensus about when or how the decision on Independence will be taken.

Sir John said constant dithering on when a decision would be made did no one any good and he reiterated the UK's position was Independence would be best decided after a referendum because it gave no ambiguity about the result.

Asked about Premier Alex Scott's idea to combine an election and referendum he said: "It's premature to comment until the Government has decided what it wants to do.

"The question about whether you have a referendum at the same time as the election or you have a qualified majority ? we shouldn't cross those bridges until we come to them.

"I would say that indefinite uncertainty on the constitutional issues is not in Bermuda's interests. At some point it should be brought to a conclusion."

Despite being the Queen's representative in Bermuda he recognises there are strong passions among those who claim everything would be better in an independent island.

"When sometimes I read that something would be different if Bermuda was independent and there's a comment that it isn't necessarily logical, I am also thinking to myself it may not be logical but it could be that people would behave differently in an independent Bermuda.

"Those opposed to independence need to understand the arguments of those in favour and one of those arguments is that it would change the relationship between individual Bermudians and the land on which they walk. They would feel more responsible for it.

"I would not rule out the possibility in an independent Bermuda that Bermudians would be more reluctant to chuck their beer cans down the Railway Trail because it would be their Bermuda."

Asked if there was a lack of love for Britain, even among those who wanted to keep the present arrangement, he said public opinion was a difficult thing to read but he said EU citizenship was a probable factor for Bermudians wanting to stick with the UK.

For some the presence of a British governor is another unwelcome reminder of a racially divided past. While Sir John recognises race issues are long standing he believes they will play themselves out as an older generation, who bore the emotional scars of discrimination and segregation, give way to a new breed.

"Bermuda is a place of enormous racial awareness and sensitivity, not necessarily a place of racial discrimination or violence."

He said the Pitt Commission identified solutions 25 years ago. "The Pitt commission drew attention to the dangers of alienation of young black males. That phrase 'young black males' is used by politicians now. The Premier was on the Pitt Commission, it's very interesting that these issues have been around for a long time.

"It would be arrogant to suggest that the Governor on the island for four years is going to have a huge effect on that.

"But it is also clear to me that everybody in a position of authority has a responsibility to be careful of what they say to not rub these sensitivities the wrong way.

"There are sensitivities on all sides. I think it may well take another generation ? another decade or two ? before all the different ethnic communities in Bermuda live together with lessened sensitivity. I think it is a question of time and meanwhile we have to be careful not to make those sensitivities worse."

Mr. Vereker would not be drawn on whether one example had been Senator Burch's "housen*gger" comments.

He said the Pitt Commission had highlighted the need to run an economy and society which was inclusive and gave everyone a stake in the future.

With a GNP per head of around $50,000 per year Bermuda is one of the wealthiest places in the world, said Sir John, who added that research showed economies which grew tended to be more tolerant, better governed.

"Economies which don't grow tend to fail to provide the opportunity for some groups to change their relative position."

Looking at Bermuda he said: "There is not much point in further economic growth if it simply makes successful people more successful. It must be economic growth which is inclusive in which everybody feels they have a benefit.

"It must be balanced in that economic growth values what we want."

The concept fitted with sustainable development, said Mr. Vereker, by not robbing the next generation. "We have to invest ever more effectively in young people.

"It's no use just wishing everybody could participate in the economy. You can't really do it through the tax system, you have to do it through the education system. You have to ensure that everyone coming out of our schools, every student out of college is properly prepared for the labour market in Bermuda."

Mr. Vereker, who worked in the British Education system for four years, said: "Our experience in the UK was that a useful first step was the assembly and publication of data of what's going on in the schools."

He said Bermuda was unusual in that it had never suffered mass unemployment.

And unlike the US ? the world's most successful economy where real incomes only really rose twice in the20th Century ? Bermuda had been booming with real rises in income for as long as anyone could remember.

"It's been relatively easy to accumulate wealth and possessions here and increase consumption. Expectations here are high. Expectations are that it is quite easy to make a living.

"My message is in the world as a whole it isn't, in the world as a whole is characterised by period of mass unemployment and by decades of hard graft before you start to accumulate."

However, he conceded that there were those whose expectations had been lowered by Bermuda's housing market. "It's not such a bad thing to rent."

Responsible for Bermuda's internal and external security, Sir John pointed to some successes with prison numbers at Westgate an eight-year low. "The popular feeling that prison is bursting at the seams with criminals isn't the case.

"I think Hubert Dean has done an excellent job, I was telling him this only yesterday when I formally thanked him for what he's done."

Prisons Commissioner Mr. Dean is set to retire this week but Sir John would not comment on news stories that the new Commissioner-designate was former Regiment boss Eddie Lamb who will initially work under UK prison consultant Bryan Payling before taking over next year.

He said: "Government House did facilitate the employment of Bryan Payling as a consultant to the corrections department and we have reason to suppose he's prepared to stay on for a bit.

"We have a lot of confidence in Mr. Payling who has a lot of experience from the prison service in the UK and the ability to work with a Bermudian counterpart."

Sir John would only say he was waiting on advice from the Public Services Commission on who the next commissioner would recommend to him.

Under the constitution the Governor has the power to refer that recommendation back if not happy with it.

Recently there was another public spat about the leadership of the Bermuda Regiment.

Asked if the Regiment had become just another forum for racial factionalism Sir John said the Regiment was vital for Bermuda's security.

"Below the froth, there's a good deal of substance, I wouldn't worry too much about the froth. If we didn't have a body capable of deploying formed units in a properly managed way for crises of one sort or another we would have to invent it. We would have to invent a national guard or a stronger Police reserve or a territorial army or something.

"Bermuda is the remotest part of human habitation of its size. We are not within helicopter distance of anywhere, we are 850 miles from the nearest Wal-Mart.

"They are going to have to cope with whatever is thrown at them, whether it is a national disaster or a manmade disaster. And you have to have a resource for that.

"With my encouragement we are starting to see more intensive regional encouragement. OK, the region is a long way south but there are other small islands out there which don't have the capacity of the Bermuda regiment.

"The fact that the regiment has been deployed to both Cayman and Grenada since I have been here and has trained in Jamaica are good things.

"They give those islands a sense of comfort and give us a sense of exposure and contribution. It's healthy to feel a sense of mutual responsibility. Bermudians give a lot of weight to the social function of a Regiment which takes youngsters from across the spectrum and puts them together in a distinct environment and creates what I would describe as social capital ? a common experience."

Recently Sir John appointed former Regiment commander David Gibbons and former Police Commissioner Jonathan Smith to the Defence Board and he said the pair had a wealth of experience.

"It's also absolutely critical that the Regiment work in sync with the other emergency services.

"That's why having a ex-Police commissioner is the way forward. I have great confidence in the defence board. They are doing a terrific job."

Sir John also takes in interest in good governance and he welcomed the new position of ombudsman as well as the choice of Arlene Brock as head of that Government watchdog.

Asked about the pressure put on Auditor General Larry Dennis by the Government over recent years Mr. Vereker said: "I think in any jurisdiction you find a bit of tension between the instruments of Government and those deliberately set up to hold them to account.

"We have a long-established and effective Auditor General here. It's not entirely surprising when the Auditor General draws attention to what he sees as weakness in the public accountability that not every minister welcomes what he's saying. But that's an inherent and in my view rather healthy tension."

Sir John, who had a background in development finance before his appointment to the Bermuda post in 2002, would not comment on how long he plans to stay, although he said he and his wife were enjoying their stay very much.

"I will stay until the Queen appoints someone else and the Queen will be advised by the PM."

Certainly he regards his role as important.

"Bermuda does matter, it has a significant population, it is a significant financial centre.

"It's GNP is larger than all the other overseas territories put together.

"It is important Bermuda remains stable and well governed, democratic ? all the things that make Bermuda strong."