What can Mr Blair do about all his revolting backbenchers?

The rebellion on university top-up fees looks at present more menacing than any that have preceded it

Mr Blair's stylish attack on Michael Howard in the Commons yesterday cannot disguise the dangers posed by one Bill above all others in the Queen's Speech. The political perils of top-up fees hardly have to be spelt out. Robin Cook pointedly remarked yesterday that it is one thing for prime ministers to take on the party by appealing to the country; another to take on both the party and the country. Or rather (as he did not add) at least those middle-class, electorally floating parts of it that the Conservative Party knows - for all its rhetoric about standing up for the poorest students - are likeliest to feel the greatest pain from tuition fees.

This is much stronger meat than the foundation hospitals vote, which the Government came perilously close to losing last week. Whereas those proposals had been so watered down as to make the disagreement well nigh symbolic, these amount to a real world social revolution in the way we pay for higher education. Other reforms as radical as this have enjoyed a measure of consensus; on top-up fees Blair is fighting on both his right and left flanks. Never mind that that the Opposition leader was a senior member of the government which set up the Dearing Committee because it recognised that a crisis in higher education funding was imminent. Never mind, too, that the Tory alternative spells either elitism - a big slump in student numbers - or higher taxation, or both.

For the Government's argument is stronger than it looks. Hamish McRae made an incontrovertible case on this page yesterday for why the universities need more money if British higher education is to be one of the great strategic industries of an increasingly competitive future. The question is whether variable fees of up to £3,000 a year are the right way to do it. Well it may be a cliché to say so, but it isn't clear what is so socialist about expecting poor parents whose children don't go to university to pay through their taxes so that richer kids can.

As importantly, should universities soak up unlimited funds at the expense of other, desperately needy, education sectors when an alternative and internationally proven method of paying for (only some of) it is at hand? It is a big, and in some ways painful cultural shift. But no poor student will be worse off than now; and those who do borrow to pay fees will only pay back their loans when they start to earn more than £15,000 a year. And no family, rich or poor, will now have to pay fees up-front, or until they can afford to do so.

And is a limited market in higher education so crazy? Given that the choice of university affects earning power, should the pricing partly reflect that as well? And isn't it sensible that universities should lower their prices for undersubscribed physics courses while charging more for hugely over-subscribed and rather less obviously useful courses such as media studies?

Nevertheless, this rebellion looks at present more menacing than any that have preceded it. Remarkable figures from Philip Cowley at the University of Nottingham show that Labour MPs have rebelled more than those of any governing party since 1945. Even a majority of the newest, rather atomised, intake of Labour MPs have rebelled at least once. This time, moreover, the rebels - more than 100 names on a Commons motion already - will be joined by Robin Cook, who supported the Government over foundation hospitals and has all the authority conferred by an honourable ministerial resignation.

Tomorrow's important consultative document from the Labour Party should suggest that the party leadership is open- minded about the big issues in politics. It won't duck questions about equality and how to balance spending against the public reluctance to pay too much tax. But that will not alone prevent what promises to be an even more turbulent parliamentary session than the last.

Enter, at this point, the Chancellor. His unhappiness about what has now become the high noon of the coming parliamentary session is well known. It was not that he objected per se to the principle of parental contributions. He worried that teachers or graduate nurses would have to pay back to the state a higher proportion of their income than, say, City accountants. This pointed to a graduate tax, though as Charles Clarke complained to colleagues in the fraught discussions which followed his appointment as Secretary of State for Education last year, the Chancellor did not produce detailed proposals for one.

If so, that's partly because Mr Brown thought the issue should be left to the next parliament. He argued that universities already had a generous settlement and if they were going to get a lot more, they should show more willingness to reform. There is much in this; many of the universities, not least some of the most venerable, have a long way to go in becoming more entrepreneurial and improving their rather ramshackle systems of governance. Against this, the Blairites bluntly argued that if Britain's vital competitiveness in higher education was to be maintained, the country couldn't wait that long. Reform, which Clarke also saw as vital, would have to go hand in hand with the new funding arrangements - close to but not actually a graduate tax - as it was doing in health.

What matters here however, is that the latter view became government policy. A question now is how energetically Mr Brown will feel able to argue in favour of a proposal he was, at least in matters of timing, originally against. There are hints in Whitehall that the Chancellor and the PM are getting on better than before. True or not, the relationship has never been more important than now. For Mr Brown could yet be required to play a pivotal role in helping to deliver the victory on which much of Mr Blair's domestic success in a parliamentary session in which he has never been under greater pressure could depend.

Mr Brown is far from all powerful in this; many of those 100 MPs have unshakeable convictions against top-up fees. Others are just stroppy with Blair, and looking more to their local constituencies than to the future of Blairism. But you don't have to buy into conspiracy theories triggered by the fact that his long time political ally Nick Brown was speaking publicly for the rebels yesterday, to realise that a robust defence of the policy by the Chancellor at the crucial time could make a big difference.

This is high politics, or has the capacity to be. The Prime Minister would be severely wounded by the failure of this legislation, a crucial test of the Blairite continuous programme of public service reform. At one level that would be to the obvious benefit of the Chancellor. On the other, the damage of defeat might yet spread much wider than No 10 Downing Street. Either way, the future shape and domestic direction of the Government is likely to rest with the outcome of this Billabove all others.

d.macintyre@independent.co.uk