Stephen Glover: Fleet Street is the stage for a tale of jealousy worthy of Shakespeare

Roger Alton's resignation as editor of The Observer may seem to outsiders like a little local difficulty. Don't you believe it. In fact it marks the culmination of a titanic power struggle far more bloody and ruthless than almost anything one is likely to see at Westminster.

Mr Alton's basic problem was that he was too good an editor. Since The Guardian adopted the European-style Berliner format two years ago, it has struggled to maintain its circulation in what is admittedly a highly competitive market. But in the no less cut-throat Sunday quality market, its sister paper The Observer, which also adopted the new format, fared very much better. The Guardian has lost 5,000 or 10,000 copies a day since its pre-Berliner incarnation; The Observer has put on not far short of 100,000 copies since it changed shape.

This was hard enough for Alan Rusbridger, editor of The Guardian, and his colleagues to accept. They also watched in dismay as Mr Alton flirted with David Cameron and backed such unlikely causes for a left-of-centre newspaper as a higher threshold for inheritance tax. Nor did The Observer's support for the invasion of Iraq go down at all well at The Guardian. Some of Mr Alton's columnists were regarded by The Guardian's high-minded liberals as virtual "neo-cons". The Observer's editor's choice of stories, and their dramatic presentation, sometimes recalled the populist Daily Mail more than the primmer Guardian.

It is true that under his editorship The Observer continued to lose a good deal of money, though less than it had when he took over nearly 10 years ago. The losses, however, gave Mr Rusbridger and his supporters a justification to move against him. A measure of integration between the two papers was proposed, involving so-called seven-day working, which would save money as well as clipping Mr Alton's wings. Such curtailment he reasonably could not accept. His successor as editor, his former deputy John Mulholland, will in effect have to defer to Mr Rusbridger. The Observer has been brought within The Guardian's orbit.

An insight into the recent bitter relations between the two newspapers is evidenced by a forthcoming book by Nick Davies, a Guardian writer, which suggests that Kamal Ahmed may have played some role in the production of Alastair Campbell's February 2003 "dodgy dossier" when he was The Observer's political editor. This is vigorously denied by both Mr Alton and Mr Ahmed. Other rotten apples have been tossed from one paper to the other. In a recent column, The Guardian's Polly Toynbee was permitted, if not encouraged, to express wonder at The Observer's editorial line on inheritance tax.

This is above all a Shakespearean tale of jealousy and power. If Mr Alton had not been so successful he might have survived. Or if he had been more pliable. Mr Rusbridger seems to have found The Observer's continued existence as a separate title with its own staff unendurable, and the decision to bring the paper to heel reflects his imperial ambitions as much as his sense of jealousy.

The trouble is that, in half incorporating The Observer into itself, The Guardian has forgotten the pledge its senior executives gave when it acquired the paper in 1993. Then we were assured that The Observer's different traditions would be respected and honoured. They have not been.

The Guardian has broken its word, as well hounding out one of the most successful editors in Fleet Street.