Steve Richards: Rumours that the government is in decay are exaggerated. The opposite is true

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In the highly charged atmosphere of British politics, what is happening is rarely the same as what is perceived to be happening. Frail governments are hailed as mighty administrations. Strong regimes are dismissed as weak. At certain points in the political cycle we choose not to see what is in front of our eyes.

To prove my point let us return briefly to Labour's long honeymoon after the 1997 election. In those heady days, the Government was cheered from all quarters. The commentaries written after the first 100 days are enough to generate drooling excitement even now. Events were viewed through a glowing prism in which New Labour could do no wrong.

In reality, a nervous, inexperienced administration was acting with undue caution and at times with extreme ineptitude. It was in the autumn of 1997 that Britain's entry to the single currency was ruled out by a spin-doctor in the Red Lion Pub at Westminster. Tony Blair was forced to give his first major television interview as Prime Minister to declare that he was a "pretty straight kind of guy" amidst allegations of sleaze. Meanwhile, Labour MPs were threatening to rebel against cuts in benefits to single parents.

If any of these events had taken place recently, they would be cited as proof that Blair's authority had collapsed and the Government as a whole was losing direction. At the time, they generated fleeting headlines amidst adulatory reviews and soaring poll ratings.

Almost every political event is viewed currently through the distorting prism of Tony Blair's pre-announced resignation. We know that he will be taking his bow at some point in this term. As a result, displays of internal restiveness and insignificant cock-ups, such as last week's defeats over the Religious Hatred Bill, are cited as symptoms of decay. Now, developments must fit a different narrative from the early years, one in which the Government is sinking.

The revolt over the education White Paper is seen widely therefore as a sign of a collapse in discipline. Yet the opposite is the case. The rebels are being astonishingly mature and restrained. Labour MPs feel as passionately about schools as Tory backbenchers did about Europe in the 1990s. The thoughtful dissenters have read the recent White Paper and noted the likely iniquitous consequences or energy draining irrelevance of the proposals. But, unlike the Tory Euro-rebels, they are not screaming from the rooftops.

Neil Kinnock turns down interview requests. Estelle Morris makes clear that she is objecting with great reluctance. Apart from those that can't wait to see the back of Blair, Labour MPs agonise about their dissent and are desperate to find ways of supporting the Government. Cabinet ministers are loyal even in private and stir only on issues where Blair has no strong feelings such as the smoking ban.

This is unrecognisable from the early 1990s, when Conservative MPs used to queue outside studios to speak out against their government. I recall bumping into two overexcited Conservative dissenters between interviews one of whom told me: "We are available for anything, Newswnight, Today, after dinner speeches, bar mitzvahs". She was only half joking.

In response to the revolt over Europe, the Major government panicked and oscillated wildly in its response. Those around Blair appear to be reacting wisely. On GMTV's Sunday Programme, the former Blairite cabinet minister Stephen Byers told me that it would be untenable for Blair to win the Commons' vote in relation to his proposals for schools on the back of Conservative support. He added that he and others had made this clear to the Prime Minister.

Given Blair's misguided machismo over the issue at his recent Downing Street press conferences, I had assumed wrongly that the likes of Byers and Alan Milburn had been urging him to stand firm and take on his party. But they display, instead, astute antennae and a concern for the future. Blair, too, recognises the cavalier recklessness of making "education, education, education" his great theme and yet prevailing against the wishes of his own parliamentary party.

So the deft New Labour choreographers are orchestrating the moves back from the brink. John Prescott declares he is now on board. Gordon Brown proclaims his support. Downing Street and most Labour MPs seek some common ground. In the 1990s the rows over Europe destroyed the Major government. The conflict over education could have done the same with New Labour, but every effort is being made to prevent it from doing so.

The same applies to the transition from Blair to Brown. In spite of the mutual suspicions, the two of them have a capacity to unite in order to survive or flourish. We saw this at the election, when they appeared together throughout the campaign, buying each other ice creams. Now they come together in the hope that Blair can leave behind a more-or-less united party and Brown can inherit one.

The same people that created New Labour in 1994 are involved once more. Vital intermediaries, Alastair Campbell, Philip Gould and Ed Balls play their parts in ensuring that a dialogue is sustained, their desire for Labour to retain power as great as it ever was. Even the two titans at the top are as nimble-footed as ever, knowing almost instinctively what needs to be said and done. Blair goes out of his way to state that Brown is his natural successor. Brown backs the Blair agenda and waits until his moment comes.

Almost unnoticed, the two of them in their separate spheres remain on top form, the equivalent of Lennon and McCartney producing the occasional stunning solo albums. Last week in Oxford, Blair delivered a candid, insightful and authoritative speech on Europe and responded with energetic verve to difficult questions from an informed audience. He should take part in more such exchanges away from the whirl of headlines when the media defined context is nearly always one of whether he will be "strong" or "weak".

Over time, such events make an impact even if they do not attract the headlines immediately. Meanwhile, Brown has announced that Alan Greenspan is to become an adviser to the Treasury, the symbolism of the appointment alone should worry Tory strategists determined to caricature the Chancellor as a return to an old Labour past.

The broader political situation remains extraordinarily febrile. Labour MPs are wary of Blair's agenda. Brown wants Blair's job. The local elections loom. Perhaps the whole enterprise will implode at some point soon. But for now a party in a third term is showing the same astonishingly ruthless appetite for power that it has demonstrated for more than a decade.

Discard the distorting prisms. Labour did not walk on water in 1997. It is not sinking now.