The pack smells blood. But this is one fox that will outrun them all

If you are in a hole, the first thing you should do is ... ask yourself whether you are really in a hole, or whether in fact you are sitting on the top of a mountain, ruler of all you survey. There will be a lot of hole-sitting in Brighton this week, I predict. Some members of the Labour Party have PhDs in looking on the gloomy side of life.

Hence the funereal tone of the latest assessment of the prospects for modern social democracy in Renewal, the Labour journal, written by three bright lights of the modernising faction which once gave Tony Blair the closest thing to a power base in the party. (Cheekily, Renewal still carries Blair's name at the head of its editorial advisory board.)

The first heading, in an editorial about why Labour might lose the next election in a reverse landslide, is: "The hole we are in and how we got there." This is extraordinary. The party assembles in Brighton today for its last conference before an election at which the near-universal assumption is that it will win a third term. That is third, as in the ordinal form of three, which is one more than two, and two more than one. Or third term, as in 12 years of Labour government, with no obvious impediment to extending it to 16 years.

A jet-lagged and confused foreign correspondent might assume, in some of the fringe meetings at Labour conference this week, that they had stumbled into a soul-searching session of US Democrats. "Why the long face, John?" has been the big question in American politics since the primaries, and we are beginning to find the answer. But why the long faces here? Yes, the Liberal Democrats are doing well in our opinion poll today. If that is the sort of bounce they can get simply from being on television, they are well placed for an election campaign in which the broadcasters are required to give them airtime. But that may simply make it harder for Michael Howard to challenge Blair - even with Labour's lead an anaemic two percentage points Blair is heading for a majority of more than 60.

Faced with the prospect of Labour governing for a generation, though, the troglodytes of Renewal are still digging. The party is "sleepwalking to a probable victory" at the next election, "but with no real sense of why or how". This is not an isolated view. On the contrary, it is almost the consensus among the left-liberal commentocracy. Blair is the most successful leader of the progressive tendency in British politics since at least Lloyd George, and it feels like failure. Mostly, of course, this is down to the war, although it may be that pessimism and oppositionalism run through parts of the left like seams of basalt. Much of this critique of Blair would probably have developed, perhaps more slowly, even if he had said to George Bush at the summit on the Azores on 16 March last year: "So far, friend, but no further."

But the invasion of Iraq has incensed a large section of opinion, almost beyond reason. One otherwise serious columnist recently summarised approvingly the view of some senior civil servants, present and former: "Every day he [Blair] remains is an affront to the constitution." Suddenly, we are transported back to the Thatcher years, elective dictatorship and all; to a prime minister whose hold on office is, according to right-thinking opinion, so obviously illegitimate that we can only wonder at the failure of the checks and balances of our unwritten constitution to activate the ejector button. Then it was mass unemployment; now it is Iraq.

In some ways, perceptions of Blair are growing closer to those of Thatcher - out of touch and inflexible, as our poll suggests. But it should be remembered that for many years inflexibility was a strength for Thatcher, not a weakness. And being "out of touch with ordinary people" has a double meaning, because it could simply refer to a lifestyle of being driven around in cars and holidaying at Cliff Richard's place, without the pejorative implications.

Blair's survival is not an affront to the constitution at all; it is a personal affront to those people who think he is a war criminal and a liar. Fortunately, they are not as numerous as they think they are, or as might be guessed from reading the comment pages. The one finding that stands out from our poll today is that the proportion of the electorate who regard Blair as "more honest than most politicians" has increased since the last election. Yes, increased - despite "Taking us to War on a False Premise", a cliché uttered so often people could simply refer to it as TWFP. The Blair honesty figure stands at a modest 29 per cent - but it has gone up. Compare it with Thatcher's 11 per cent before herfall.

There is a notable discordance, therefore, between the views of Blair held by the anti-war liberal left and the rest of the country. If Iraq is taken out of the argument, the critique of Blair is important - it is the most important philosophical debate underlying the conference this week. It is expressed well by the editors of Renewal. The "New Labour project" has "burned out" and could collapse as quickly as the Tories did after Black Wednesday in 1992. "The difference being that, unlike the Thatcherites, we won't have transformed the political, economic and social landscape of our country," it states.

Important, and utterly wrong. New Labour did not have a mandate for the "transformative" change so beloved of the Blair-disappointed. It was elected to deliver competence and fairness in moderation; and it has delivered triumphantly. As the editors of Renewal write: "With its investment in the public services, the Government has qualitatively shifted the terms of political debate on to social democratic territory, and has compelled the Tories to follow suit." Full employment and higher spending on reviving public services. What more do these people want? I don't think they really know. They don't particularly want a Gordon Brown leadership, which they dismiss as a "more coherent Blairism". They probably want a country that feels like somewhere between Sweden and Narnia.

Fortunately, not only is such negativism unrepresentative of the country as a whole; I think it is unrepresentative of much of the Labour Party. Delegates to conference have, since the Neil Kinnock years, been of a more pragmatic cast of mind than is often assumed. Journalists came to Bournemouth last year expecting trouble. They assumed delegates shared their anti-war liberal-left views and, with the Hutton hearings fresh in their minds, would howl the young war criminal down. Instead, they gave him a standing ovation before he had even said anything, not because they agree with him on the war or anything else, but because they respect a leader who has delivered two big election victories - the sort of thing that, curiously, a political party cares about.

At Brighton this week, there will be more delegates who are proud of a Labour government, its achievements and its ambitions for the future than many of the journalists who are descending on them expect.