When Labour abandoned Clause 4, it embraced privatisation. There was no longer any appreciable difference between the two parties. In power Labour has in fact been worse than the Tories.
I was a Labour Party member (and at various times, Chairman, Secretary and candidate) for about 20 years. The Labour Party which I remember led the fight against the Poll Tax in our area and could be relied on to support people who were out on strike.
It is not just the quantity of Labour members but the class content and ideology which has deteriorated.
When I was a kid we had a rhyme:
"Labour:Tory both the same
Puppets in the bosses game."
Truer now than ever before.

I am a member of the Committee for a Workers International  http://www.socialistworld.net/

I am absolutely no fan of Labour but to say that the decline in membership is down to removing Clause 4 (which meant nothing anyway as far as the Labour leadership was concerned) is rubbish. In just a few years after it was removed, membership hit 400,000! No where near Blair's target of 1 million, of course. The decline partly due to Iraq and partly cos the party doesn't really care about it members and partly cos people don't want to belong to a party who has the policies Labour do.

By the way I used to be a Lab member in the 1980s and I'm an anarchist now, so there!