It's just like British politics 10 years ago

The parallels with today are obvious enough, but they can be taken too far. Black though Wednesday may have been for Tony Blair, it does not compare with the disaster that engulfed John Major's administration on the day Britain left Europe's exchange rate mechanism.

September 16, 1992, was one of those rare days when you could keep up with the political news just by being out on the streets overhearing conversations between strangers. As interest rates went up and up, rising from 10 to 15 per cent in four hours, hundreds of thousands of homeowning families faced the awful prospect that they would default on their mortgages and lose their homes. Economic forecasters warned of millions of job losses, and still the currency speculators abandoned sterling.

When the Chancellor, Norman Lamont, finally emerged from the Treasury, flanked by his young adviser David Cameron, with the good news that interest rates were back to 12 per cent, the universal sense of relief was tempered with an enduring contempt for a government which had taken this vastly expensive gamble and lost. At the time, it was rumoured to have cost the British taxpayers between £13bn and £27bn. The real cost - £3.3bn - emerged after the Tories had been thrown out of office.

Until Black Wednesday, the public at least respected the Conservatives, even if they didn't like them much. There was a stratum of the electorate that voted for them on the grounds that they might be heartless, but at least they knew what they were doing. After Black Wednesday, they were neither liked nor respected.

John Major's reputation fell through the floor, as he went from being one of the most popular prime ministers to one of the most despised. Previously, the public had rather taken to his self-effacing ordinariness. He was a pleasant contrast from the overbearing Margaret Thatcher. It was as if the bloke from down the street had become Prime Minister. But the public realised that the ERM fiasco was Major's personal responsibility, even if the hapless Lamont was made to pay the price - a point rammed home by Lamont's vengeful resignation speech, with its devastating line that Major was "in office but not in power".

It was against that background that every little sleaze scandal ballooned into a political disaster. It is a myth that sleaze destroyed the Major government. But after Black Wednesday his government was like an organism whose immune system had been so damaged that every sniffle became a life-threatening fever.

The Tories had had scandals before, but had ridden them out. As late as autumn 1993, the London transport minister Steve Norris owned up to having had five mistresses at different times during his marriage, and kept his job, with no political damage done. But at the Conservative Party annual conference in October 1993, Major tried to relaunch his sinking government with the slogan "Back to Basics", a campaign that was to include a return to traditional moral values. For the next three and a half years, journalists had a riotous time exposing the peccadilloes of one Tory MP after another, each case adding to the impression that the government was run by incompetents who lectured on morals but could not keep their trousers on.

Some of the sleaze stories were just silly, like the Tory MP whose wife said he was gay, whereas he claimed that his decision to share a hotel bed with a man had been a way of saving money. Others were tragic, like the strange case of the MP whose body was discovered draped over his kitchen table, clad only in women's underwear and stockings, with cord tied to his neck and an orange slice in his mouth.

Meanwhile John Major's hold over the Commons slipped away, as the seething resentment on the right over the ousting of Thatcher crystallised in a prolonged battle over the Maastricht Treaty. In one famous conversation, which was taped without his knowing it, Major complained of being held to ransom by three right-wing "bastards" in his Cabinet.

On a foreign trip, Major gave an off-the-record briefing to journalists in which he questioned the sanity of his tormentors, saying that one of them made him think of "white coats flapping". In summer 1995, he resigned and stood for re-election, in the vain hope that it would subdue dissent.

His whole premiership, in the end, was subsumed in a daily struggle to manage his unruly party. His party responded by treating him with open contempt.

During the 1997 general election, he made it known that he did not want either Neil Hamilton, the central figure in a long-running sleaze scandal involving cash in brown paper bags, or Piers Merchant, who was photographed carrying on with a teenager in a public park in his constituency, running as Conservative candidates. Their constituency parties contemptuously ignored him and stood by the errant MPs.

Tony Blair is not popular in his own party. In large parts of it, he is hated - but it is the hatred that a strong-willed leader attracts from those who heartily wish they could be shot of him. Far from being obsessed with managing his own party, Blair is accused of treating Labour with disdain, like an absentee landlord.

The Prime Minister's hold over the Commons may be slipping, but it is not in the state of perpetual crisis of the Major years. And opinion polls suggest that though the voters are tired of Labour, they have not yet made up their minds to throw them out of office.