Can you say the unsayable when Downing Street is your client?

Ann Treneman on think-tanks

There is nothing that riles the new deputy director at Demos more than to ask whether the think-tank has become too close to the Labour government. "Why would you think that?" demands Ian Christie. Well, for starters, there is the fact that Demos director Geoff Mulgan is also an adviser to Tony Blair's policy unit. Can you have Big Ideas and be Labour luvvies at the same time? Shouldn't a think tank be out there ploughing a lonely furrow?

"That is the wrong view. During their heyday in the Seventies and Eighties, the right-wing think-tanks weren't ploughing a lonely furrow. They were having dinner the whole time with Mrs Thatcher and Keith Joseph. Demos doesn't do that," says Mr Christie. "Speaking personally I've never been to a new Labour luvvie party. I wouldn't know what the inside of a Terence Conran restaurant looks like. None of us at Demos live in Islington. But there is no point in ploughing a lonely furrow. The point is to be influential. So if we are influential with the Government, we are absolutely delighted."

Demos is not alone in being so delighted. The Institute for Public Policy Research is its think tank stablemate on the centre left, and soon it is faxing me a list of people who have gone from the institute into government. There are seven names on the list but there may be more. It's the kind of thing that is hard to keep track of these days.

More surprising, perhaps, is that the Adam Smith Institute is also pleased to be influential with the new government. The institute's newsletter is brutally pragmatic. "After 18 years of working with a Conservative government, the obvious question is 'How will the Adam Smith Institute adapt to working with a Labour government?' The answer is 'smoothly'."

Its director, Eamonn Butler, immediately starts dropping the names of Labour ministers who are attending the institute's new lecture series, "Achieving Labour's Aims". Can this be the same institute that once advocated the virtual abolition of government? "We prefer to think of ourselves as promoting the values of a free society," says Mr Butler. "Our job is to work with the politicians of the day. If governments change, then we have to work with them. There are many things in the Labour manifesto one can agree with. So much is in the the presentation of policy. We have to work with everybody."

A few years ago such a statement would have shocked but this is the new age of bendy centrist politics and so it only brings a laugh or two. "There is a lot of cross dressing now because the political centre has moved so much to the right," says Tessa Keswick of the Centre for Policy Studies, which was set up in 1974 by Mrs Thatcher and Keith Joseph. She, at least, is not pretending to be influential with Labour, though she does think there are areas where the two might have interests that overlap.

All of this makes very interesting viewing for the likes of Lord Harris of High Cross, who ran what was the most influential think-tank of them all in the Eighties, the Institute for Economic Affairs. "The IEA started with a wholly academic board and we were principally concerned with the economic systems of a free society. We then became quite acceptable," he says with masterful understatement. But he stresses that the IEA was never keen to be part of the inner circle of the day. "You've got to pursue the analysis with vigour and ignore what politicians say."

This is perhaps the toughest lesson for think-tanks like Demos and IPPR. After all, both are too young to have ever been close to power before. The IPPR, in particular, does not see its links with Labour as a conflict of interest.

Gerry Holtham, the director, points out that its role has always been more towards solving specific problems than speculating on big ideas. He even talks about what it was like to be in opposition and compares the role of a think-tank to that of the civil service. "Before the election we asked ourselves, will our function have to change a lot when Labour win? Surely, we thought, they will have civil service that will do a lot of the policy analysis that we in the past have done. But these last few months have shown us that it is not true. There is scope for our problem- oriented approach simply because the civil service is working on the current agenda and doesn't have the capacity to deal with the future."

Demos sees things differently. The think-tank was founded only in 1993 with the goal of breaking through the traditional boundaries of left and right, and Ian Christie has no desire to change this. He is full of plans: a big new area for Demos will be the environment and future work will be much "crunchier" (ie aimed at providing specific solutions). Independence is key.

"Many of our publications could be adopted by the Tories," he says, gesturing towards the pamphlets in Demos's distinctly untrendy offices near Fleet Street. "We want to be influential with the Conservative party. It's no good to this country to have a Conservative party that is as intellectually bereft as the Labour party was in the early Eighties. Part of what Demos is about is to give a home to Conservatives who want to rethink what they are about."

Geoff Mulgan agrees. "The Tories are very important to us. Don't get aligned. That's what stops thinking." Such a statement would carry a bit more weight, of course, if it wasn't being delivered by an adviser to Tony Blair, and many onlookers are watching to see what happens next. "If you've sold yourself as a think-tank that is independent then you lose some of your legitimacy once you take the inside track," says co- founder Martin Jacques. "This is clearly a problem for Demos."

Yesterday Demos sent round a press release clarifying Geoff Mulgan's role. It said he was taking leave from his post as director but that he would remain involved in Demos' work. It is a compromise but still a tough line to walk. The job of an exceptional think-tank is to think the unthinkable and say the unsayable and to care about little else. After all, politicians come and go but a great thought can last forever. Or at least that's the idea.