This has been by far the biggest crisis of the Blair government in its first six months. It has been like one of those explosive family arguments that erupt in close-packed private houses up and down the country at this time of year after one too many bottles of the cooking whisky: after six hectic, overworked and emotional months, ministers have been berating each other about welfare cuts with a passion that has to be heard to be believed. Folly, treachery, gutlessness and panic are some of the milder charges being laid.
From the perspective of the most hard-line modernisers, the ``flinchers'' are weak reeds, broken by the first gust of cold wind. They are not tough. They have no vision. They are not new or modern. On the other side, the modernisers are seen as heartlessly and woefully incompetent. Harriet Harman in particular is portrayed as a naive ideologue, who has swallowed a package of measures from the Treasury and civil servants that better politicians, such as her Tory predecessor Peter Lilley, rejected with a snort of ``whaddya take me for?'' laughter.
I am assured that, though there will be a radical rethink of policy, people who really are disabled and cannot work won't be penalised. Who defines disabled, and how, is of course at issue. But Blair has told friends he won't be standing at the next election, having damaged the lives of genuinely vulnerable and hard-up people. He is surely well aware that some of his most loyal New Labour supporters are angry and suspicious about all this; and that the voters' demands of him include fair play for the poor.
There is, in short, a temporising and calming mood about. Yesterday Baroness Hollis, Minister for the Disabled, was using the language of compromise, stressing the proposals were merely ``a paper put up by officials'' that wouldn't be swallowed whole. David Blunkett is to sit alongside Harman on Tony Blair's committee looking into the issue.
And it is perfectly possible that Blair will deliver welfare reforms that make the system work better without betraying Labour's best instincts. There will be a tough look at who gets what and why. Given the huge increase in invalidity benefit payouts that is hardly surprising. There are well- off people getting benefits they don't need, while many more, including the million pensioners living below the poverty line, don't get enough. If benefits could be better targeted, there would be no uprising of protest.
Ministers will also reflect on the fact that it is vastly more difficult to get coverage of welfare changes where there are no leaks or cabinet rows: the "new deal'' for the young unemployed gets going next month. It is enormously important and enormously ignored.
So what useful lessons can Blair draw from the row? First, that one of the very few pressures on him that means anything is cabinet. A few grumbling chaps with beards are still a formidable force, and New Labour cannot afford the kind of split that opened, however briefly, this weekend.
The huge Labour Commons majority and the idle incompetence of the Tory opposition during the past six months mean that Westminster has been neither check nor balance for Mr Blair. No party showdown looms: its constitutional changes mean that activists don't have the platforms for protest they used to have; anyway, most of them want to be loyal and are keeping their mouths shut, even at the expense of badly bitten tongues.
He has recently been blaming the media, still only half-seriously, for trying to fill in for the Conservatives as the opposition - ``and that's not your job'' - but in truth, few newspapers are taken seriously in Downing Street. So long as Murdoch and Rothermere are on side, the rest can go hang. In short, Blair need not worry much about Parliament, press or party. With nine-tenths of his first administration still in front of him, it is an enviable situation.
But the lesson of big-majority governments, including those of Attlee and Thatcher, is that trouble comes from the top. It is the Bevans and Heseltines you have to watch for, not the Canary Wharf keyboard-batterers or the backbench point-of-orderers. However big the mandate and however dominant the prime minister, the acrid mix of ambition, vanity and ideology that comprises the internal combustion of cabinet-level politics eventually explodes, and explodes again, and again.
Looking at the group of people around Blair and occupying the main cabinet positions, I'd rate the chances of avoiding trouble at less than zero. Just as Thatcher started in 1979 with a cabinet that was non-Thatcherite, even anti-Thatcherite, and culled it carefully, trying to reshape it in her image, so Blair will be well aware that his cabinet is not really New Labour at all. His closest supporters speak often in private about what would happen to the modernising project if he were to be hit by the proverbial bus ... or perhaps, more appropriately, a motorised wheelchair. They are not sanguine.
Just as Thatcher never found enough Thatcherites, and found that some people turned against her, so there will never be enough Blairites. Further, Blair's first cabinet comprises more big and difficult personalities than the Thatcher cabinets of 1979-83. His ``wets'' will be less wet than her wets.
Already some of them feel they have woken up inside a radical right government. For those who still call themselves socialists - at least in private when the bedroom door is shut and the lights are out - this has come as a particularly unpleasant shock. The Prime Minister is not, perhaps, much concerned. Certainly his public response, which was to tell them to get stuffed, and to do so in the Daily Mail, was hardly calculated to soothe. It was the kind of thing she would have done. But there are limits to the power of presidential politics inside a system of cabinet government - as Margaret Thatcher can testify.
In this case, the Prime Minister's instincts are not the same as those of David Blunkett, Robin Cook or Frank Dobson. He is a progressive politician, but he is not Labour under the skin, as they are. He must punish the leakers and stick to the broad course he has set. But he must also prevent a serious split at the top of government.
The events of the past few days have been a warning, not simply about the difficulty of managing the news, but also about the importance of Labour's values, and its faith in itself as the party of decency. To prosper, Blair's smooth-chinned modernisers need to work in relative harmony with their bearded friends (John Prescott and Clare Short are hereby awarded honorary beards, this being Christmas). They were all, after all, elected as New Labour - not simply as New.