Blair's real problem is not with Brown but with the bulk of his own party

The Blairites boasting of the humbling of Brown do not appear to grasp they are celebrating a Pyrrhic victory

I like Alan Milburn. I even supported him in Cabinet when he first proposed foundation hospitals, and I still believe that he was right in his analysis that the NHS needs to develop a stronger local identity and looser central control. I am pleased to see him back in the Cabinet.

But it is precisely because I wish him well that I wonder whether his close friends have done him any favours by urging him to accept the poisoned chalice held out to him. Labour will win the next election, but it is going to be tougher third time round. The result may not look like a triumph on the CV of the man who masterminded it.

In the meantime, there are nine fraught months in which Alan Milburn has been set the task of whipping the party into line behind an ultra-Blairite manifesto. This may prove even tougher than winning the subsequent general election. The rumour is that Tony Blair has returned from his tour of foreign villas invigorated, refreshed and armed with a sheaf of new initiatives inspired by his break in the sun.

One of the themes which has exercised the Prime Minister while he has been away is the need to deliver welfare reform, specifically to cut the numbers on incapacity benefit. (It is a curiosity of Blairite code that "welfare reform" turns out to mean worse and cheaper welfare, never better and more generous welfare.) But the medical test for incapacity benefit has been progressively tightened since Labour came to office. Any fresh drive which penalises people who are chronically sick or severely disabled will command neither the sympathy of the public nor the votes of Labour MPs.

Those same Labour MPs have just returned from their summer among their constituents with fresh anecdotes of the public disaffection with party politics in general and this Government in particular. There is little appetite in Mr Blair's party for another push forward in his long march to marketised public services and laissez-faire economics.

Alarmingly, the central message in the briefings from Downing Street on the appointment of Alan Milburn reveal no comprehension that the Prime Minister may be marching ahead without noticing that he can no longer assume his supporters will follow. There is no suggestion that the next manifesto will be the product of any process of consultation, such as listening to what Labour MPs have heard from their constituents. All the spin is that Alan Milburn has been put in charge of writing a manifesto that will suit Tony Blair and which will then be bounced through the party machine which Tony Blair also controls. This is what Trotskyists described as Vanguardist politics, in which an élite of true believers, namely themselves, determined what was right for everyone else. To be fair, the Trotskyists never pretended that they were operating a democratic process.

Ironically, Tony Blair's last speech before the summer recess was his address to Labour's National Policy Forum in which he called for an end to party infighting. Unity is an admirable goal, but it hardly squares with the spate of briefings from the Blairite camp that the appointment of Alan Milburn is one in the eye for Gordon Brown. Members who are loyal to the party rather than personalities feel like shaking them by both shoulders and begging them to understand that it is logically impossible to undermine the second most powerful minister in the Government without weakening the Government as a whole.

The reality is that this Government has been a success precisely because a balance has been preserved between Gordon Brown and Tony Blair. Its strength is that both of them have brought distinctive priorities to the Labour agenda which has been the key to its broad appeal. Tony has reached out to the aspirant Daily Mail reading classes with a pitch on choice in public services, business-friendly regulation and a deep freeze on their income tax bill. Gordon has stabilised the core Labour vote with a programme of social justice that has lifted young families and pensioner households alike out of poverty and a jobs package that has wiped unemployment off the political agenda. Those Blairites who over the past 48 hours have boasted of the humbling of Brown do not appear to grasp that they are celebrating a Pyrrhic victory of which the real cost will be damage to the electoral base on which they also depend.

There was a glimpse of this dichotomy in Alan Milburn's inaugural interview on the Today programme. He defined Labour traditional values as "opportunity, community and reward for aspiration". Well, yes, but what about those other core Labour values of solidarity, social justice and public services driven by a public ethos rather than commercial return? Without the presence of both these elements of Labour's diverse traditions, the party's message limps on one leg.

This is where the presentation of the current fissure in the Labour Party as a simple matter of a personality clash between two individuals misses the mark. The reality is that the Blairite agenda is now supported with enthusiastic conviction by only a sect of loyalists and true believers. The majority of what is left of the Labour Party would identify more comfortably with the position represented by Gordon Brown. The contest is not between two equally matched giants, but between Blair and the bulk of his own party.

Not that this would psychologically trouble the Prime Minister. Since the moment he became leader, Tony Blair has established his credentials with Middle England as the man who stands up to the Labour Party. From his first campaign to drop Clause Four, he has picked fights with his party not because he thought they represented great issues of substance, but because they symbolised his rejection of traditional Labour thinking.

This strategy has worked like a dream for him in the past because, hitherto, he always had the weight of public opinion behind him to bulldoze his party opponents out of the way. But what is striking about the Blairite agenda of the second term, from invading Iraq to imposing tuition fees, is the deep unpopularity they provoke among the public. The danger for Tony Blair is that he has entered a new era in which the Labour Party is more popular than himself, and his backbench MPs may be more in touch with public opinion. In these circumstances, picking a fight with Labour MPs and activists is no longer sensible politics.

There is a fundamental difference of strategy that underlies each argument within Labour on individual policies. Tony Blair is still a devotee of triangulation, the politics of stealing your opponents' clothes. His strategy has been to anticipate the next right-wing attack and to make it himself. By contrast, those outside the Blair circle hunger for a Labour Party that would offer a modern popular version of progressive politics which would mobilise positive support from those citizens who want a cohesive, just and open society. The really depressing message of the reshuffle is that it suggests that, even after seven years in office, Downing Street does not have the confidence to believe Britain possess a progressive majority to be mobilised for such a programme.