Tony Blair has grasped the width of the Labour revolt but not its depth

How else to explain his confidence that a few extra weeks will persuade the refuseniks to see the wisdom of the policy they oppose

Not even the most astute commentator leafing through Labour's manifesto and noting its soothing assurance that we had legislated to prevent top-up fees could have predicted that this issue would mushroom into the biggest political crisis for the Government.

Political correspondents make it their stock in trade to report the consensus of their conversations with MPs and I hope they will forgive me if just once I repay the compliment. Of the various experienced lobby journalists who have approached me in perplexity over the past week, I can report not one has been able to fathom what the Prime Minister hopes to gain out of picking top-up fees as High Noon for his Government. This in itself is pretty damning. Sensible political leaders only provoke a crisis if the gains from victory are large enough to be obvious.

The eccentricity of the present strategy can be seen more clearly if we press the rewind button and travel back a few months to midsummer. Then Tony Blair was warned that the news from repeated focus groups was that Iraq was a lost cause in public opinion and the nation wanted their Prime Minister restored from the world stage to the domestic scene. The advice was taken to heart. The Prime Minister ever since has been so effectively grounded from foreign travel that his staff appear to have impounded his passport in the office safe and only grudgingly allow it out for unavoidable engagements such as a Commonwealth Summit.

This should have provided more opportunity to trumpet the solid achievements of his period in office, such as the improvements in the NHS documented in this week's report. Yet far from adopting a more consensual political style, Tony Blair has responded to his confinement to domestic politics by picking a fight on a policy which has provoked an even bigger rebellion among his backbenchers than Iraq.

The persistent briefing that the rebels will be bought off by tweaking with the income threshold for repayment only demonstrates that Number 10 still does not grasp how profound is the split which the proposal for variable fees has provoked. Fundamental to the ethos of the Labour Party is the principle that public services should provide equal access to all citizens, unlike the market place where consumers are inevitably treated unequally according to their different purchasing power.

Variable fees introduce a market in higher education in which students from richer backgrounds will pay the higher fees that can be commanded by the more prestigious universities, while the newer universities will gain little benefit as they find extra revenue absorbed in bursaries for the majority of their students from low-income backgrounds. Labour MPs have difficulty in comprehending how it can be in line with progressive values to back a measure that will widen the gap between the universities of the elite few and the universities of the many, and are not reassured by the noises from within the new Ivy League who forecast full market fees of £15,000 or more after the transitional period.

Last week Charles Clarke conceded that variable fees would create a market in higher education, but added that is "not the main point". I am sorry, but for the opponents of variable fees that is the main point. It is a point of principle that goes well beyond the impact of such a market on fairness in higher education. Behind the hostility to variable fees lies the deep, brooding suspicion that if Tony Blair wins the battle, he will launch a renewed drive to widen private finance as the basis of capital funding of public services, private contractors as the people to manage them, and co-charging of patients and pupils to pay their bills.

The delay in the vote on top-up fees reveals that Tony Blair has grasped the width of the backbench opposition, but he does not yet seem to have grasped its depth. How else can we explain his confidence that a few extra weeks of patient explanation will persuade the refuseniks to see the wisdom of the policy they oppose? This has not won any friends as it borders on the insulting notion that backbenchers are opposed to the proposal because they're incapable of understanding it without one to one tutorials.

Most commentators have written up the resistance to variable fees of Labour MPs as an embarrassment to Tony Blair. Personally I suspect that in the innermost circle of the bunker at Number 10 the opposition is welcomed as an opportunity to prove the Prime Minister tough and resolute. Tony Blair has made a lifetime career out of winning press plaudits for standing up to his party. But on previous occasions he has won those battles because he was cutting with the grain of public opinion, and both he and his Party emerged stronger because the result was to put Labour in touch with modern Britain.

The miscalculation this time is that it is his backbenchers who are more in touch with public hostility to trebling tuition fees. This is where I fear my colleague Don Macintyre is mistaken in drawing parallels with the controversy in the dying days of the Sixties Labour government over In Place of Strife. On that occasion Labour flunked Wilson's invitation to respond to the widespread perception in the public, and among many union members, that there was a need to modernise trade union practices. This time round it is the Prime Minister not the party who is out of step with the public mood.

That is the fatal flaw in his appeal for support on the gambit of "back me or sack me". Backbenchers know that "back me or sack me" is not a viable electoral pitch for themselves when they face constituents stoutly opposed to top-up tuition fees. Anyway, this is a political tactic subject to a sharp law of diminishing returns. It is barely six months since he last employed it over Iraq, when he urged backbenchers to give him the benefit of the doubt and believe that weapons of mass destruction did really exist.

The great mystery remains what precisely Tony Blair hopes to achieve by this confrontation. If he loses he will have further diminished his authority and split his party on the eve of the election battle. But if he wins he will have made it more difficult to win that election battle by committing his party to a deeply unpopular policy that more than any other will erode support in the new middle-class constituency which he himself recruited as Labour voters. It is a lose-lose situation.

Tony Blair needs to find a way out of the confrontation. He will have the full co-operation of the rebels in finding an escape route. Their objective is to halt variable fees, not to defeat their Prime Minister. Nor is there anything dishonourable in a Prime Minister canvassing opinion and then letting it inform his political strategy. That after all is precisely the point of his Big Conversation with the public. Not even Tony would actually buy a car that had no reverse gear. Now is the time for him to demonstrate that among his formidable political skills is the ability to conduct a tactical retreat.