Chancellor was key, but PM showed steel in his gamble

When in a moment of exquisite political theatre the Chief Whip, Hilary Armstrong, approached the Treasury Bench last night to whisper the result to a relatively impassive Tony Blair, it was John Prescott beside him who gave the game away with a huge and unmistakable grin.

That was appropriate. For Mr Prescott is undoubtedly the unsung government hero of last night's victory.

It was he who remained, throughout the twists, turns, jealousies and misjudgements on the way to last night's extraordinary denouement, focused on the big picture - the need to avert a defeat.

And it was Mr Prescott who made the most of his role as the one big figure commanding the equal respect of the two protagonists of this high-wire drama, Tony Blair and Gordon Brown.

Where the events of last night leave the relationship between those two men was the question preoccupying Labour MPs last night.

In one version, promoted at least as assiduously by the defeated Conservative Opposition as by Mr Brown's allies, the Chancellor rode gallantly to Mr Blair's rescue in a way that only strengthened the former at the expense of the latter.

In the competing version, Mr Blair spectacularly called the bluff of the rebels - including some of the Chancellor's close allies - and perhaps the Chancellor himself, by gambling his job on keeping the principles of a deeply controversial Bill intact.

As usual the truth is more complicated than either version allows. Mr Prescott's involvement is instructive because he has always wanted - and still wants - to see Mr Brown succeed Mr Blair, but he has been equally consistent in making it clear that the succession should take place at time of Mr Blair's own choosing and on his terms, and certainly not through the loss of a flagship Bill. Unsurprisingly, Mr Blair turned to his deputy on Monday night as the man best able to try to broker a deal with the rebels - but one which did not undermine the basic principles of the Bill.

When the rebels' two ringleaders, Nick Brown and George Mudie, sought further improvements to the new formula on a future independent review of the fees policy, an increasingly impatient Mr Prescott apparently made it clear that the Government could go no further.

When the Mudie-Brown duo consulted their allies and then sent the message through to No 10 that the review was not enough to buy off the rebellion, the mood in and around No 10 and the Department for Education and Skills, appeared to have hardened against any further concessions.

It was later that evening that the Prime Minister and Chancellor spoke. The Chancellor, of course, had already had to swallow his long-held and well-known doubts about the wisdom of pushing through politically radioactive reform of higher education in this parliament, to declare his unequivocal support for the measure and start to persuade some of the potential rebels to come back into the fold.

But Mr Blair was adamant by this stage that no further concessions of substance could be made; he had felt unhappy about having allowed the Bill on foundation hospitals to be watered down as much as it had been to get it through. Indeed it was Mr Blair's willingness to do just that under pressure from the Chancellor, that played a large part in Alan Milburn's decision to resign as Health Secretary. Mr Milburn had felt - understandably - that he had been let down by Mr Blair after consistently resisting changes when they were originally proposed by the Chancellor.

Mr Blair appears at this stage to have shared with the Chancellor his intention of resorting to a "nuclear option" by using a confidence motion to revisit the measure. If the stakes were high last night, this would have made them higher still. For it would have required those voting in the government lobbies on a confidence motion also to commit themselves to the reintroduction of the Bill - even though parliamentary rules would require a "No 2" Bill to have enough minor differences not merely to be a repeat of one which had already been defeated. True, there was a relatively recent precedent. In 1993 John Major successfully used a confidence motion to reintroduce the clause of the Maastricht Bill on which he had been defeated the previous day.

It looks as if this shock tactic played a part in Nick Brown's conversion by his senior namesake.

At the very least, politics played its part as much as, if not more, than the important but relatively modest last-minute concessions unveiled by Charles Clarke as late as yesterday. Mr Brown did not want his close ally associated with a revolt whether it won or lost.

Mr Blair's perilously narrow victory is not without cost. The pressure on him to eschew the white-knuckle politics which characterised last night's vote will increase; and that is what Mr Brown has been warning him to do for some time.

Equally Mr Brown - his own reputation intact - remains impatient to replace Mr Blair.

On the one hand there is still plenty of room for battles ahead, perhaps over a European constitution which Mr Blair is far more sanguine about than his Chancellor; almost certainly over the public spending review. On the other hand they have, oddly, been getting on better personally than in recent times.

The reality is that this fraught but central relationship remains as unpredictable as ever. In the end Mr Brown was crucial in containing a rebellion, albeit one which he did nothing to halt in its early stages and which some Blairites still blame him for fomenting in the first place.

Equally Mr Blair showed real steel in gambling his job on what for all the closeness of the vote remains a decisive victory.

The platitudinous truth is that the two men still need each other. It is a truth that Mr Blair has always found rather easier to accept than Mr Brown.