Orderly withdrawal in face of outrage: In the wake of the Birmingham summit, Andrew Marr analyses John Major's predicament

JOHN MAJOR is leading what failed generals call 'an orderly withdrawal'. The interest-rate cut and the new package for the miners showed his government dramatically retreating in front of an outraged public and a menacing line of red-faced, grey-suited, Tory MPs. The trick now is to stop the retreat turning into a panic-stricken rout from which the Cabinet cannot recover.

Can Mr Major get back in control? For a weak government, every remedial action can seem merely like a further spasm of fear. In this case, senior ministers are crossing their fingers in the hope that extra money from the reserves to retrain redundant miners will prevent a defeat on the floor of the Commons next week. But No 10 is aware that such a defeat is entirely possible. The favoured strategy then would be to demand a 'sudden death' vote of confidence.

Presuming that won a reprieve, Mr Major would then have to offer more to the miners than the current package, whose details he agreed over the past 48 hours with Norman Lamont and Michael Heseltine. How much more? Could a delay in some closures, and a public cost analysis be ruled out? Well, no one was ruling it out last night. In theory such an outcome is not entirely beyond the Commons' reach.

To try to ensure he never has to face that, Mr Major is expected to talk to a selection of the most influential backbench critics over the next few days. And it is a reasonable guess that he will argue his way through. There is a ritual in these crises: the grandees of the 1922 Committee need their grandness vindicated by the odd obeisance from a struggling prime minister. If Mr Major can persuade himself to eat a little humble pie when they call, the various Sirs will find it hard to join Labour in the lobbies against him. Probably, they will turn out to be paper knights.

Even then, however, he may have to confront tougher anti- Maastricht Tories who believe, for obscure reasons, that the pit closures are part of the grand Germano-Brussels conspiracy. At any rate the threat of a Commons revolt breaking the Government's will over pit closures is a real one.

The Prime Minister is going to have to deploy every ounce of his famous charm and every subtle party manager's trick he has ever learnt to avert it. The Birmingham summit, partly designed to help him through his other great Commons test, the ratification of Maastricht, has helped nothing. Harassed British officials spent much of their time trying to explain what vague stuff about subsidiarity had to do with the real world of recession. Their answer was that the summit was supposed to demonstrate the 'confidence' the economy craves. But the Commission and the Germans had made clear they thought its main purpose was to help Mr Major out of his domestic political crisis - hardly a confidence-inducing thought. Birmingham will go down as the unnecessary summit. The decision to cut interest- rates will be more important, domestically at least. The government will need all its political skill to present this as responsible economic management. Again, this looks like panic. If the exchange- rate still matters, then why are interest rates being cut while the pound drifts downwards? If that doesn't matter, and only the monetary and housing market indicators, published yesterday, do, then why not a 3-point cut in base rates? There is a reasonable answer, which is that interest- rates will carry on being cut as long as the pound doesn't go into a hair-raising, inflationary dive. But the timing of yesterday's cut was the latest in a series of presentational fumbles. Did it come now just because the Prime Minister was having a bad day? If that is the criterion - a point off for every hellish morning - we will have zero interest-rates in under a fortnight.

That, at least, won't happen. But it is a symptom of current political hysteria that everything seems possible and nothing quite believable. This was underlined by rumours in London that a sharp rise in upper-rate income taxes was being planned by the Treasury.

Ministers and other Whitehall sources denied any such intention. 'I don't want to pre-empt the Chancellor', said one, 'but let me say just three words: sheer, bloody, lunacy.' Indeed. But there is a bit of that about. There is a credibility crisis and no easy, or quick, exit. An orderly retreat, followed by a long winter siege, is the best the commander can hope for. The worst is unthinkable.