The aftershocks of a great event are only just beginning to reverberate through our national life. A week ago, Gordon Brown announced that the Government was working towards the replacement of the pound. The sudden reopening of geological rift running through the Conservative party is only one of the effects of this clear public statement. Equally significant, although less remarked upon, was the German Chancellor's declaration that he would bend the rules to keep a seat for Britain at the top table drawing up the plans for the single currency. Important, too, was the confirmation that the main organised economic interests, the TUC, CBI and Chambers of Commerce, are committed to, and preparing for, abolishing the pound in five to seven years' time.

When Mr Brown's words on monetary union fully sink in, they will change our national psychology. This is it. We are going in. All right, we do not know when exactly. We do not even have a target date. But we know we are set on a course. Helmut Kohl would not have put his coat on a seat for Britain if Tony Blair had not made it quite clear that he intended to sit there, and soon.

Barring an unforeseen change in economic circumstances, in the Chancellor's phrase, the next election will be fought as a dress rehearsal for a referendum on the single currency soon afterwards. At some point, all the great and good who believe in the single currency will have to come together to campaign for a Yes vote. We do not know when that will be, although the Government intends it to be "early in the next parliament", which could coincide with the issue of euro notes and coin in January 2002. (Until then, the so-called "single currency" will only mean the irrevocable fixing of exchange rates.) But the Prime Minister and Chancellor effectively launched the Yes campaign last week. Most of the eminent opinion formers who would be on the Yes committee have identified themselves publicly in the past seven days, including most of the big hitters in the Pro-European Party-Within-The-Conservative-Party. Paddy Ashdown even talked of "a grand coalition" to work for the euro.

This is certainly politics on a larger scale than we are used to. Boris Johnson, Euro-sceptic commentator, yesterday mused about the Tory party becoming "an ox-bow lake left by the flow of history". Equally, however, Mr Blair is taking a big risk in associating Labour with the interests of big business against the little-guy nationalism of William Hague's Tories. All the emotional arguments are on the side of the Poujadists: the thousand years of history, sovereignty and the sovereign's head, decimalisation, price rises being sneaked past little old ladies who can't do the conversions in their head, fears of unemployment, and who-won-the-war-anyway anti- German sentiment.

Sure, the argument will look a little different when euro mortgages are two percentage points cheaper than sterling ones, when Marks and Spencers start taking euro notes and multinationals price everything internally in euros. But Mr Blair cannot rely on it being a replay of 1975, when an initially hostile public was swayed by the soothing assurances of the Establishment.

So the Prime Minister deserves restrained praise for taking a stand against the drift of public opinion for once, although it has to be said that this is a form of leadership that would not be recognised by his alleged role model, Margaret Thatcher. He is the most cautious of risk-takers, always with an eye to the escape route. It was not the Prime Minister but the Chancellor who made the Commons statement last Monday. It was not the Prime Minister but the grandees of industry and the Tory party who stood up to plead the case for the euro last week.

This is leadership by nudging the crowd in the right direction and putting oneself in the middle of it. It is good politics, but it is hardly Brave New Politics. Through his Chancellor, Mr Blair has now disowned the coarse nationalist slogans - all about St George and the slaying of dragons - he penned for the Sun during the election campaign. That turns out to have been a cynical pitch for the votes of Middle Little England; the real Mr Blair tipped us the wink the weekend before polling day, saying: "If we win this election, we will have done so without ceding any ground that cannot be recovered."

It is not pretty, it is not open, and it is not altogether honest; but it has confounded the Euro-sceptics, including those in Mr Blair's own party, and it has kept the right-wing press wolves at bay. However, the single currency referendum is going to have to be fought and won, and it won't be won from behind. One day, Mr Blair will have to emerge from the crowd and lead. The sooner that day comes, the better.