This may be a political soap opera, but it could yet lead to the euro

Loose talk of a few months ago about the possibility of Mr Blair sacking his Chancellor to get his way now looks like fantasy

A little awkwardly, Tony Blair this week dismissed questions about a "pact" with Gordon Brown to hand over the leadership as mere "soap opera". He may have had no alternative. The evidence so far is that Mr Brown some time ago rejected any Faustian bargain under which he would inherit the leadership in return for backing Mr Blair on a euro referendum. In any case, even if such a pact existed, it could hardly be announced, threatening as it would to make Mr Blair an instant lame duck Prime Minister.

And yet, as Mr Blair well knows, today's soap opera has a funny habit of turning into tomorrow's history. Take an extreme, if recent, example. The full extent of the tensions inside Downing Street during the Harold Wilson years - and in particular his problems with Marcia Williams - didn't become clear until the publication of books last month, some 30 years after the event, by two insiders from the period, Joe Haines and Lord Donoghue.

But even away from the often fraught inner courts that surround prime ministers, it's long been clear that the rather more elevated struggles within government are, far from being absurdly magnified by gossip-hungry journalists as the participants routinely claim, more likely to be underestimated. To take another example, from the same period, after reading Professor Ben Pimlott's excellent biography of Wilson no one can suppose that the chronic problems Wilson had in dealing with, say, George Brown were exaggerated in contemporary reporting. If anything, the reverse.

This isn't to say that the "soap opera" of the present day is the same. Each era brings tensions of a different type. More relevant perhaps - as the author himself recognised - was Giles Radice's fascinating account of the relationships between Roy Jenkins, Tony Crosland and Denis Healey. And you can't read that book without becoming utterly sceptical of the notion that personalities don't matter in politics. Each of these men had convictions and high intelligence; each were brought into politics by a desire to change the world they lived in. The first two, at least, were close friends. And the behaviour of each was significantly affected by the feelings of personal rivalry towards each other.

So - pace Mr Blair - the "soap opera" matters rather a lot. Who's up and who's down is an inescapable, even if frequently tiresome, part of politics. It's therefore not unnatural that even an issue of as huge and fundamental importance as the euro should be discussed in terms of the relationship of the two most important men in British politics. Or that the reshuffle on which Mr Blair is likely to embark today will be analysed partly in terms of how congenial it is to Gordon Brown. (Supposing Alan Milburn is moved from health - even if he is promoted to a Home Office that loses some of its key functions to a new Ministry of Justice; won't that be a triumph for the Chancellor who has fought a long battle against the foundation hospitals that Mr Milburn has so assiduously promoted? And so on.) Or that Tuesday's otherwise notably unexciting press conference should be minutely examined for the body language between the two men. (Perhaps the only really trivial point so far unmade about that episode is that the Chancellor, who can normally bring himself to refer in public to the Prime Minister only as "Tony Blair", more than once referred to him with the more friendly "Tony".)

Which brings us to the current issue of where the two men stand after the Chancellor's statement on the euro last Monday. Leave aside for a moment the deeply depressing fact that the Government is only now embarking on a campaign to justify policies on Europe that it has supported for even longer than the six years that it has been in office, instead of doing so years ago when it enjoyed a much more hegemonic influence on public opinion than now. Or that it has left the country and its businesses as confused as they were previously about the destiny of the pound. Who's up and who's down?

Though Mr Brown has certainly been strengthened, there are, I think, two slightly different readings of how. One, conventional as well as compelling, is that Mr Brown has now demonstrated beyond doubt that he enjoys an absolute veto over euro entry; that despite being genuinely in favour of joining at some point, he proposes to exercise the veto probably until after Mr Blair ceases to be Prime Minister; and that Mr Blair is seriously weakened by seeing a central element of his project go up in smoke; and by knowing that the one man who could deliver a "yes" vote in a referendum is unprepared to do so. For all Blair's automatic dominance of Tuesday's press conference, or his undoubted mastery of the Commons yesterday, it was all too possible to imagine him, amid chill intimations of mortality, wondering what he was going to have to show for his second, and perhaps final, full term.

That remains plausible. But the other reading is that Mr Brown's new found willingness to defend the principle of euro entry represents a real shift, not of ideology - because he has never been against it - but of strategy; and that this strategy has a dynamic that could yet lead towards the single currency, if not in this parliament, then shortly after the next election.

First, Mr Brown is not the sort of politician who embarks on a course and suddenly abandons it. If he is really going to go round the country defending the principle of British euro entry, then yesterday's Daily Telegraph poll (showing that 55 per cent of electors currently trust him on the euro compared with 12 per cent for Mr Blair) suggests this will have an impact.

Secondly, yesterday's meeting of the Parliamentary Labour Party, according to those present, suggested a new-found willingness for a genuine fight with the Conservatives on Europe, if anything fuelled by Mr Brown's positiveness on the euro - not to mention his willingness to appear on the same platform as Mr Blair. And this may create an appetite within the party for a referendum, if the economics look anything like right and Mr Blair is bold enough to be clear he wants it, which will not easily be denied the party with impunity.

This (distinctly pro-European) reading could be wildly optimistic, of course. The conditions that Mr Brown set out on Monday allow a great deal room for exercise of the veto if the Chancellor chooses to apply them with a literal force of which he is fully capable. Loose talk of a few months ago about the possibility of Mr Blair sacking his Chancellor to get his way looks like fantasy. And Mr Blair has had to concede to his Chancellor that now is not the right time. A great deal now depends on whether the campaign on Europe and the euro is real, successful and sustained. It will be much easier to judge next Christmas than now whether the second of these two readings can be remotely justified. And, yes, the complex and frequently fractious relationship between the two men will continue to matter very much. Whether you call it soap opera or not.

d.macintyre@independent.co.uk