Steve Richards: Amid all the doom and gloom, there are signs of a way out of this mess

It is worth stating again how extraordinary the situation is. A Prime Minister re-elected six months ago faces the prospect of humiliating defeats on the pivotal elements of his entire domestic agenda. Such a prospect makes John Major's final period in power seem like a smoothly harmonious political journey. Major's main battle was over the single issue of Europe.

According to the apocalyptic soothsayers, Blair faces defeat in relation to NHS policies, education, welfare reform, the introduction of ID cards, smoking bans and the replacement of trident. If they are right the leader of a parish council will have a bigger influence on events in the coming months.

But listen to the voice of a potential rebel. The former minister, John Denham, was interviewed on the BBC's Westminster Hour last Sunday. Denham is a far more important figure on the back benches than when he was a relatively anonymous minister. He plays brilliantly the role of the assiduous and articulate critic, examining policies forensically. Like the much-missed Robin Cook he is wily enough to avoid unsubtle personal attacks. Also like Cook he rebels selectively.

In the interview Denham made the important point that the number of Labour rebels determined to destroy Blair at the earliest opportunity is relatively small. There are not enough of them to deprive the government of its majority. I would go further. Most of the internal critics seek a smooth departure for Blair. They do not want to see Blair, and quite probably Labour's electoral prospects, go down in flames.

Brownite rebels in particular will hold back if it looks as if the sole beneficiary from the conflagration would be the Conservative Party. It is a myth that Brown can control the behaviour of most rebels, but those that turn to him will be told to act with restraint. Others will do so in the long-term interests of the Labour party. The rebels are not by any means a single coherent group.

More importantly, Denham pointed out in the interview that most of the potential rebels are not "anti-reform". They are concerned about some of the details and the potential for iniquitous consequences. This is an important and often overlooked element in the febrile political equation. Blair tends to present the internal argument simplistically as one between the good guys that are "pro-reform" and the backward-looking old Labour baddies that are "anti-reform". In doing so he is making another rod for his increasingly scarred back.

Denham praised some of the controversial NHS reforms, pointing out that competition from the private sector had broken up some cosy cartels established by NHS surgeons. But he was adamant that he would not support independent hospitals competing with each other across the board for patients, a jungle with no safeguards. In other words he gave an example of where reform had worked and some of his concerns about future reforms. It was a balanced assessment.

There are echoes here with the legitimate concerns of Labour MPs and some cabinet ministers in relation to the proposals for secondary schools. Some of the potential rebels are not against a diversity of schools. They want more assurances that newly established institutions will not cheat by selecting the brightest pupils.

These concerns do not amount to wholehearted and reckless opposition. Indeed if policy making had not been so centralised in the midst of Labour's traumatic second term, some of the MPs could have been brought back on board much earlier. But is Blair willing to engage belatedly in a constructive dialogue with MPs?

I do not believe that he is in a recklessly destructive, Après moi, le déluge mood. That phrase has an enticingly romantic dimension, suggesting that the show will not go on when the main player leaves the stage. But it signals also a climax in which the main player fails to get his reforms through and destroys his party.

Blair has stated publicly that he would regard it as a personal failure if Labour fails to win a fourth term. Privately he is even more expansive on the theme and with good cause. It is revealing that many Conservatives blame Margaret Thatcher for the party's defeat in 1997 even though she had ceased to be leader seven years earlier. He will not be forgiven if he leaves a party in disarray with only the cheers of right-wing columnists ringing in his ears.

But there are signs that Downing Street is adapting to the changed political situation. It is delaying initiatives for as long as possible in order to maximise the time for discussions between Blair, ministers and MPs. The Education Bill will not be presented to MPs until February. The welfare reforms will be delayed for longer. Evidently No 10 regards the additional time as space to persuade rather than concede, but that does not mean the discussions will be fruitless.

Blair is opposed to selection on the basis of ability at the age of 11. Part of the problem arises from the White Paper. It states only that new schools must "have regard" to the Code of Practice that rules out selection. I have checked again with Downing Street. They are emphatic that in effect it will be illegal for new schools to pluck out the brightest kids to the detriment of the other nearby schools. Here is room for some useful exchanges with anxious MPs. In relation to the NHS reforms, the Health Secretary, Patricia Hewitt, is adopting a more pragmatic approach without undermining the powerful argument that a degree of competition will improve the efficiency of NHS hospitals. Already she has cut back stealthily on the expansion of independent treatment centres.

A Blairite cabinet minister tells me that for all the misguided rhetoric of "full steam ahead" in relation to the reforms, there is a new, urgent mood of consultation within government. He acknowledges that for the first time since 1997 some MPs are being regarded almost as partners in power rather than distant irritants. Here is a twist to the last few days of dramatically gloomy headlines. Some good will come of it as the more constructive Labour backbenchers are treated almost as seriously in Downing Street as newspaper proprietors.

In their separate ways Blair and the potential rebels have more in common than they dare to realise. They could act inadvertently as agents for a reinvigorated Conservative Party. Alternatively they could dance together on common ground for one last waltz. I see small signs they have opted for the dance.

s.richards@independent.co.uk