Political Focus, with Bill Jacobs

WEDNESDAY night's massive rebellion over cuts in lone parent benefits has rocked the Government, left the Whips split down the middle, and called into question New Labour's reputation for competence.

The whole affair was an amazing saga of blundering as the leadership was taken by surprise by a rebellion they should have seen coming miles off, and then made worse by cackhanded handling.

The resignation of Scottish Office Minister Malcolm Chisholm - a long-standing campaigner for women's rights - should also have been anticipated.

The fact that he quit along with three unpaid Parliament Private Secretaries, including Pendle MP Gordon Prentice, emphasised the scale of the rebellion.

But the scope of the rebellion - from "usual suspects" on the Labour left such as Dennis Skinner, Diane Abbott and Worsley's Terry Lewis, to loyalist new boys such as Bolton South-East's Brian Iddon - is the most alarming aspect for the government.

When right-winger and former front bencher John Marek lines up with Red Ken Livingstone, something is really wrong.

But the savings involved - £395 million over three years - are tiny.

If the Labour High Command had spotted the rebellion coming early enough, a quick U-turn and some compromising noises could have stopped it in its tracks.

But when the Social Security Bill - which contains the cut - came before the Commons for Second Reading early this year, there was not a peep of protest from the Labour benches.

This was despite the fact that the Liberal Democrats had put down an amendment to reverse the cut. After this, the leadership seems to have got arrogant, and by the time they realised the scale of the problem, it was too late.

In the words of one senior figure: "The issue didn't matter any more. It became a question of credibility and it just had to go through."

The first reaction was to get very tough, but this backfired and hardened the rebellion.

The next stage is regarded by some senior figures - and Downing Street - as sheer lunacy.

Deputy Chief Whip George Mudie took it upon himself to advise dissident backbenchers to write to Prime Minister Tony Blair on the issue, rather than sign public protest motions.

He also hinted that if they did this a U-turn was on the way.

Mr Mudie let it be known that he shared the strong feeling the proposals was wrong, and should be ditched.

At this point the rebellion suddenly surged and experienced left-wing backbencher Chris Mullin got 120 MPs to sign a round-robin letter to Ten Downing Street.

The result was a a furious Whips' meeting, which one observer said was "a full-scale shouting match" and another said: "It was real blood on the walls stuff.''

Several of the Whips were furious that they had been trying to keep people in line and getting pliant backbenchers to support the changes, only to find Mr Mudie undermining them. The Social Security Whip Kevin Hughes, a former miner who had swallowed his own misgivings on the issue, to become its chief enforcer, was angriest of all.

Indeed, one of the team remarked: "Our job is to get government business through - whether we think it is right or not.

"George's behaviour was unforgivable - virtually treason. He has split the Whips' Office down the middle."

It is understood that Mr Mudie is being blamed at Downing Street for the unexpected scale of Wednesday's revolt.

And indeed, some of his colleagues were relieved that it was finally only 47, as half-way through the evening as many as 70 backbenchers were set to revolt.

Only some old-fashioned arm twisting got 20 or so dissidents into the right lobby.

It has certainly brought home to the Labour High Command that a huge majority is a mixed blessing.

Rebels such as Mr Lewis hope that it will lead to Mr Blair and his inner circle listening to the backbenches.

Whatever else happens, the gloss has come off New Labour's shiny image, both in terms of it being caring and compassionate, and competent and efficient.

There is a lot of hard work to be done to regain that lost ground.

But what is certain is that Mr Mudie is highly unlikely to have much to do with that.

Insiders now expect him to be unceremoniously returned to the backbenches in the Spring reshuffle, and replaced either by Glasgow Rutherglen Mr Tommy McAvoy or Rossendale and Darwen MP Janet Anderson - the next two in the Whips' Office pecking order.

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