What a surprise it was to all concerned for a memo drawn up by Tony Blair last September to suddenly see the light of day during David Miliband’s leadership campaign that dares not speak its name, wasn’t it?

Only to those who still believe in fairies living in their back garden is the answer.

It surely beggars belief that many people prominent in the Labour Party, including a number dumped from office earlier for not being up to scratch, are engaged in a media-encouraged game to mount a palace coup.

And on what basis? Nothing but image. A smiling, youthful, confident new Labourite rather than a brooding, stale, indecisive new Labourite.

The major problem with this unimaginative formulation is that it ignores the real basis for the government’s inexorable electoral decline, which is the label that both men hold in common – new Labour.

The label’s promise of novelty, honesty and modernisation took the day in 1997, but it is now tainted and despised.

Labour jettisoned 2 million votes in 2001 and 2 million more in 2005. It lost ground in the Scottish Parliament, Welsh Assembly, English local and London mayor elections and its by-election record is dismal.

Labour Party membership, which stood at over 400,000 in 1997, is now just over 150,000, with many local organisations utterly moribund.

Neither electoral decline nor popular discontent set in with the coronation of Gordon Brown last summer. They were in full swing already, which is why voters and party members wanted Tony Blair out.

Mr Blair’s suddenly revealed memo rewrites history by claiming that his once loved but now despised new Labour twin had “dissed our own record” – how so very roots – and “junked” the Blair government policy agenda.

In reality, the new leader’s failure was to have suggested criticism and hinted at change before falling back in line and carrying out the same old tired and unpopular war and privatisation policies.

The initial suggestion of an expansion of council housebuilding was dumped. The hint of withdrawal from Iraq likewise.

And, in the absence of any positive policies to put before the people, the Prime Minister lost his nerve over calling the election that he had already told the trade union movement to prepare for and has since evoked the image of a dead man walking.

And what is the political answer of the Miliband camp to this spectacle? Shoe-horn in Tony Blair Mark 2 and give long-time council tenants a lump sum to use as a deposit to buy private accommodation.

Such poverty of imagination belittles the severity of Britain’s housing shortage and confirms new Labour’s inability to think outside the straitjacket of private-sector solutions.

New Labour’s dead-end private-is-best policies ought to have been debated last year against the labour movement priorities offered by John McDonnell, whose campaign was stifled by trade union concerns to avoid a leadership contest.

The fruits of that conservative approach are readily apparent now – a government that remains unpopular and refuses to consider another political direction.

That remains the key. Without a new direction, Labour is sunk and deserves to be. The question is, are the unions prepared to take remedial action?