The Prime Minister's moral standing is crumbling beyond repair

Gordon Brown is desperate to become Prime Minister, but he also wants to inherit an undamaged government

Tony Blair is in a hole. A feline creature, he is in the position of a cat bought by a household which was overrun with mice. He turned out to be a good mouser, but there is a problem. His owners do not really like cats.

The ground of Tony Blair's being was never in the Labour Party (Gordon Brown's is). The marriage between Mr Blair and Labour had little to do with passion; it was much more leg-up than leg-over. He needed a political party; the Labourites were desperate for a winner. But Tony Blair never trusted the party he led. He felt that he could rely on very few of his colleagues; hence the regime of constant monitoring and chivvying from No 10. But this was always a strained, unreal method of running a party and a government. Even without Iraq, it would have disintegrated at some stage, though Iraq has been a double catalyst. It has not only dramatised Mr Blair's lack of rapport with his party. It was the PM's distrust of his parliamentary colleagues which led him to deceive the public about his reasons for going to war.

We now know that by Easter 2002 at the latest, Tony Blair realised that George Bush was determined to invade Iraq and that the PM was determined to help. The President had a range of reasons, including regime change, to which the US was already committed. But Tony Blair decided that he could not sell regime change to the Labour Party; he might even have had problems in getting it past his law officers. So he pinned everything on weapons of mass destruction.

This was not a complete lie. Along with almost everyone else, Mr Blair assumed that Saddam had some extremely dangerous weaponry. It could not have hit any British target in 45 minutes - with the exception of troops invading Iraq - but if the anti-war left continued to argue the toss about that, it would not matter. The PM expected to have enough material to spin himself out of trouble.

As it is, he may not yet be aware of the extent to which he has forfeited public confidence, and respect. Over the difficult months ahead, that will make it hard for him to rebuild support for his Iraq policy.

This does not mean that he is going to be forced out of office, or that he will lose the next election. But neither possibility can be discounted. Mr Blair is fortunate that Gordon Brown has become more cautious. Mr Brown is desperate to become prime minister; it seems that he has even drawn up his first cabinet. But he also wants to inherit an undamaged government. That could not happen if he seized power after an insurrection. Though there are plenty of potential Brownite rebels, their heads are still - just - ruling their hearts. This could change, and Gordon Brown himself might not be able to resist the temptation to turn a crisis into an opportunity. But the possibility of that happening is only about 30 per cent, especially if Mr Brown thinks that he and Mr Blair came to a renewed understanding over a dinner in John Prescott's flat.

That took place back in November, and some Brownites believe that the Admiralty Arch compact has now replaced the Granita Treaty of 1994. Yet such understandings are always open to misunderstanding. Gordon Brown has grumbled that if the deal in the Granita restaurant had been honoured, he would be PM by now. Mr Blair disagrees. We do not know what, if anything, was brokered in Admiralty Arch, and if the terms were drafted in Mr Prescott's language, we never shall. It would not be surprising, however, if Mr Blair's recollection differed from Mr Brown's.

It is certainly hard to imagine that Mr Blair will shortly step aside. If he did, he would leave a wounded name behind him; the political obituaries would be overwhelmingly negative. The PM also insists, as he should, that he has a duty to complete the task in Iraq. Charlie Falconer, the Secretary of State for Constitutional Affairs, said recently that Mr Blair intended to win a third term and then serve it. Lord Falconer of Thoroton knows Tony Blair well and is an honest man. Even so, I suspect that Mr Blair is not as resolute as his old friend makes him sound, and is keeping an eye on the market for dignified exits.

He is not like Margaret Thatcher, who loved being prime minister right up to the end, and could not cope with the withdrawal symptoms. There are suggestions that Tony Blair is no longer enjoying the job so much; above all, that he has no stomach for another stint on the treadmill of public service reform. Indeed, he may well be looking forward to the spring of 2006. By then, he would have expected to have won a third election, equalling Mrs Thatcher. He would also hope for a considerable improvement in the Iraqi situation. His prestige boosted - Mr Blair is nothing if not optimistic - he could then try to win a referendum on the EU constitution. A victory would mean a triumphant departure; a defeat, an inevitable one. By then, he would have passed Herbert Asquith to move into second place behind Mrs Thatcher for modern prime ministerial longevity.

There was a time when he might have hoped to surpass her. That is no longer an option. In 1989, I told Michael Heseltine that Margaret Thatcher would fight the next election. He let out a cry of anguish: "No! She can't; the party will never allow it."

Hezza helped to ensure that he was proved right. By 2006, Gordon Brown would be reacting in a similar manner to a similar prediction. He too would ensure that he was right. So it seems unlikely that Tony Blair will still be Prime Minister in two years - assuming that he has the option. Since 1951, every government that lost an election had already undergone a drastic loss of authority. Something similar may be happening to Tony Blair. There are even parallels with John Major's government. Many a conversation with his ministers went exactly the same way. They would point out that the economy was recovering and that there was plenty of good news. They would then spread their arms in a gesture of despair: "But we can't get anyone to listen." Increasingly, Mr Blair has the same problem, with the public and his own MPs.

Admittedly, they are not as revolting as John Major's were, and Mr Blair is buttressed by a huge majority. But a lot of Labour MPs now want what they regard as a proper Labour government. They did not go into politics to stand shoulder to shoulder with an American president whom many of them regard as evil incarnate. As their discontent grows, it communicates itself to the voters, who never respect divided parties.

Tony Blair has told friends that Iraq could bring him down. His prospects depend on the benevolence of events - a hazardous business. But there is one particular malevolent event which he may now be less able to cope with. If - when - there is a major terrorist outrage in the UK, will Mr Blair succeed in rallying the country, or will a lot of people say: "Now the 45 minutes has come true, and it is all your fault"?

I believe that the latter reaction will be much more widespread than it would have been even a few weeks ago. This is a Prime Minister whose moral standing is crumbling beyond repair.