Can Blair recover his zest?

It is quite unusual for politicians to own up to being in difficulty. So when they do, we should sit up and pay attention. In his welcome to the like-minded leaders and thinkers who will be attending this week's gathering in London of the global centre-Left - a talkfest sexily entitled "The Progressive Governance Conference" - Tony Blair writes that "The Third Way has lost momentum". You can say that again.

And, funnily enough, the conference chairman, the Prime Minister's old friend and collaborator in the creation of New Labour, Peter Mandelson, does say it again. He recently wrote "of a nagging feeling that the New Labour project has lost momentum". The big mo has always been at the very heart of New Labour's being.

It was and remains an article of faith with its members that governments only succeed for so long as they can sweep voters along with a compelling feeling that the country is going through dynamic change.

The exquisite revelation that Alastair Campbell has on his staff someone employed to be The Head of Story Development should not have been a great surprise. Narrative is another crucial and related New Labour idea. They have ever believed that what the public most thirsts for is a story of renewal.

"New! New! New! Everything is new!" Tony Blair gushed in one of his most rhetorically extravagant moments. "At our best when at our boldest!" he cried in his last party conference speech. "Progressives must be brave and radical," he exhorts this weekend's London summiteers.

That is why there are few ideas more wounding and more potentially dangerous to Mr Blair than the idea that his seventh year in office finds New Labour stale, sapped of energy and drifting shapelessly through its second term. It is never good for any government to look as if it is running out of steam and ideas. Enemies, internal and external, are encouraged to become more aggressive.

Fairweather friends are prompted to peel away. Not good for any government, it is especially bad for a leader who has put such a premium on the politics of momentum.

The Prime Minister is right to be concerned that an increasing number of people, even many people broadly sympathetic to his Government, are coming to a view that his Project is stalling. For what follows a stall is the free-fall.

There is a risk for leaders that such prophecies become self-fulfilling.

The moment when a critical mass of people arrive at the conclusion that the Prime Minister's days are numbered is the moment when his days become precisely that.

Ministers would like to think that much of the tiredness exhibited by the Government can be put down to the season. They may not be entirely wrong. The weather is humid. The atmosphere at Westminster is fetid. The reshuffle was bungled not least because the Prime Minister and his key aides are tired and distracted.

I am not sure any of them have properly recharged themselves since the war in Iraq.

One of the things that these supposed maestros at manipulating media and public opinion are supposed to be good at is drawing lines under rows and moving on.

And yet for several weeks now they have been stuck in a repetitive cycle of controversy, re-enacting the same or similar arguments, whether they be about Europe or the war or the public services or trust.

They can't wait to go on holiday. I am beginning to lose count of the number of New Labour strategists who say - more to cheer themselves up, I fancy, than to convince me - that things will turn up for the better in the autumn.

They wouldn't be New Labour if they did not think that there is nothing so bad that it cannot be cured by improving presentation.

If only, they sigh, ministers got out from behind their desks to promulgate the message that this is a government of bold reform with bags of life left in it. Mr Blair himself laments that their rhetoric has come over as too managerial and technocratic. Too bogged down in the thickets of targets to explain what they are designed to achieve. Just communicate a better sense of purpose, and all will be well again.

Ultimately, though, it is not from words, but in policy, that a government derives its sense of purpose. Even those inside Whitehall are rather at a loss to identify the dramatic next steps which will reinvest New Labour with a renewed sense of dynamic to carry it forward into the next election.

The great furore over foundation hospitals - which burst forth in backbench rebellion in the House of Commons yesterday - has tended to mask the reality that this reform will be much more modest in its consequences than either the Government or its opponents on the Labour backbenches like to acknowledge. And there will not be a single foundation hospital, for good or bad, before the next election.

"They don't seem to be having any fun," a former Tory Minister remarked to me the other day. "In our second term, we were exhilarated by our power to change things. We were walking on air. I don't get that sense with them at all."

He makes an excellent point. Armed with their massive majority, thrusting ministers should be fighting with each other to push their ideas into the legislative programme. And yet those in the loop of the negotiations over the contents of the next Queen's Speech say the legislation planned for the next parliamentary session is most distinguished by its lack of radical lustre.

That doesn't mean it is all over for Tony Blair. He has previously demonstrated a considerable talent for reinvention and renewal.

He has that large and still largely reliable parliamentary majority. I don't find any serious Conservatives who predict they can win the next election.

Labour still leads the Tories in most polls, a remarkable advantage for the incumbent to enjoy after more than six years at Number 10.

There should be loads of zest left in this Government. Which makes it all the more striking that so many members of it look and sound as if they are squeezed dry.