Summing up the worst Tory week since the dying days of Margaret Thatcher's premiership, the Labour leader Tony Blair said the Government was "disintegrating before our eyes". He told The Independent that the Tories had reached a crunch-point, with John Major and his Chancellor locked in combat over the European single currency.
"We have reached a decisive moment," he said, "when you have the Chancellor [in effect] fighting the Prime Minister, and one part of the Conservative Party trying to pull another part in the other direction.
"They are not capable of being led; they are not capable of governing with any coherence, any leadership, in any direction.
"John Major wants to go one way and is being blown in another. Watch out for him trying to tack to a different direction, saying he is not very keen on the single currency."
A whole host of Cabinet ministers yesterday protested that would not happen, while Michael Heseltine, the Deputy Prime Minister, insisted there was no question of Kenneth Clarke being sacked as Chancellor.
Mr Major used a more curious form of words, saying: "If the Chancellor didn't enjoy my full support, he wouldn't be Chancellor. Of course he does."
With the latest Gallup poll in yesterday's Daily Telegraph giving a thumbs- down to the Budget, and a thundering Labour lead of 37 points, the prevailing atmosphere of Westminster crisis and Whitehall panic was compounded by the Prime Minister's decision to deliver a 50-minute live interview to BBC television's On the Record tomorrow lunchtime.
Conservative MPs on both sides of the party's civil war divide will be watching that performance like hawks for signs of movement on the Cabinet's single currency agreement - toughened up by Mr Clarke and Mr Heseltine on Tuesday after No 10 had signalled impending retreat on Monday.
A senior Conservative source said there was no question of Mr Major moving away from the Cabinet agreement; sending the Chancellor to negotiate, "naked into the conference chamber" on the entry terms for the single currency. But the hard political reality is that the Government's ability to get its business through the Commons is now at risk.
No 10 and Mr Heseltine last night disputed reports that Sir John had formally resigned the Conservative whip, which would turn the Government majority of one into a one-vote minority.
However, the MP's withdrawal of co-operation does in effect wipe out the overall majority, which would have happened anyway next week when Labour wins Thursday's Barnsley East by-election.
At that point, under Commons rules, the Government loses its in-built majority on any new legislative standing committees which give Bills line-by-line consideration. That could yet create problems for the Finance Bill, which enacts the Budget.
In his second BBC radio interview of the day, Mr Heseltine said last night of Sir John's statement: "He doesn't say he's resigning the whip. He says, `I am today withdrawing my cooperation from the Government.' He has not resigned the whip. If he decides to do that, that is another matter."
That view appeared to be supported by Sir John at a Commons press conference, when he said: "If the Government was to try to discipline me in some way, that might provoke what in industrial relations terms meant `an all-out situation'."
However, Sir John, who has been fighting to save the Edgware General Hospital casualty unit that serves his Hendon North constituency, in north London, said: "I don't put the survival of my party above the survival of individuals whose lives may be put at risk."
But Mr Heseltine refused to offer any expectation of a ransom pay-off. "I'm afraid that we're not prepared to do that." Reacting to Mr Gorst's statement, Mr Blair said: "This shambles cannot go on any longer, and the sooner we get the chance to put them out of their misery the better."
The Liberal Democrat Chief Whip Archie Kirkwood said: "When the Government can't even command the loyalty of its own backbenchers, how do they expect any longer to command the loyalty of the country?"
But Mr Major can be expected to deliver a robust performance in his television marathon tomorrow. As he showed during the last election campaign, he tends to be at his best when he has his back to the wall.
Defending the Government stand on the single currency yesterday, he said: "What do I say to the businessmen, the farmers . . . if I withdraw myself from negotiations that will affect their interests?
"What do I say to them when they say to me: `Why are you not sitting at the European table protecting my interests? That's what we elected you for. That's where you should be.' And that's where I will be."
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