Are you an optmist or a pessimist? It matters when it comes to flu because the story of this winter's outbreak can be read both ways.

If you are a pessimist you will focus on the latest figures showing the rise in cases among the young is continuing - to 157 per 100,000 population in the week ending 7 December from 140 the previous week.

That spells misery for a lot of kids aged 0 to 4, and their parents, and tragedy for some. At least half a dozen have died from respiratory complications associated with the new Fujian strain of the virus circulating this year.

Professor John Oxford, the flu expert at the Royal London hospital, is a pessimist. He described the Fujian strain as a "smash and grab virus" that was targeting the young and made the case for vaccinating children irresistible.

But Sir Liam Donaldson, the Government's chief medical officer, insisted that while every death was a tragedy the number of child deaths was not out of line with previous years. He urged parents of vulnerable children with conditions such as asthma to get them vaccinated but ruled out a mass programme for all children.

Where does that leave us? Optimists will be heartened by the headline figure which shows that after several weeks in which flu cases have risen rapidly they have now stabilised at 55 cases per 100,000 population, almost level with the 53.2 in the previous week and below the peak three weeks earlier of 62.2.

That could mean we have already seen the worst of flu this winter, especially if cases do not rise substantially before Christmas. Experience shows that major flu outbreaks rarely occur after Christmas.

The Health Protection Agency remains cautious. Whether influenza activity declines over the next few weeks or will continue to increase again cannot be predicted. But ministers are crossing their fingers that this year's outbreak will follow the pattern of recent years and wither away leaving the NHS free to concentrate on cutting waiting lists.

If that turns out to be the case, then the real story of this winter's flu will be not how severe it was, as suggested by recent weeks' headlines, but how mild it was. For flu is in gentle but unmistakable long term decline.

This is not a story popular with pessimists - or newsdesks - who prefer to play up the threat from flu. But a glance at the records tells a very different story.

Last winter (2002-3) the level of flu dropped to its lowest point for 36 years, beating even the record low recorded in the previous winter of 2001-2. For two seasons running flu cases failed to breach the baseline level of 50 cases per 100,000 population, the first time this had happened since 1966.

The record lows in each of the last two flu seasons are the culmination of a 30 year decline in the level of flu, punctuated by the occasional epidemic. The seasonal peaks have been steadily sinking since the late 1960s with the last epidemic occurring in 1989-90.

The reason for the fall is thought to be a more congenial environment, says Douglas Fleming, the Birmingham GP who has run the Royal College of GPs flu monitoring service for several decades.

Less crowding and smaller families mean people spend less time breathing other people's germs. Less smoking and less pollution mean lower rates of bronchitis and other respiratory infections. The result is less chance for the virus to be transmitted and to grow.

Mass vaccination of the elderly has also contributed - last week's flu figures for the over 65s, show 34 cases per 100,000, the lowest for any age group. A change in sickness certification which meant patients could take up to a week off work without having a note from a GP, rather than the previous three days, may also have led to a fall in the recording of flu, though not in the illness itself.

All this keeps the optimists happy. But the pessimists have a killer card up their sleeves - the ever present threat of pandemic flu caused by a big mutation in the virus which would produce a strain that would go round the world, potentially killing millions of people.

Three times in the last year cases have occurred that looked as if they could be harbingers of the next pandemic when avian flu broke out in Hong Kong, the Netherlands and Denmark. A fourth case of avian flu was confirmed in a five-year-old boy in Hong Kong this week. So far these variants of the virus have lacked the infectivity to enable them to spread. As Sir Liam put it, the match was lit and fell towards the tinderbox but it did not ignite. If a future mutation does ignite, then the pessimists will have the last - cough.