There can be no greater proof that the writing is now on the wall for Tony Blair than the events of Thursday night and yesterday morning. Electorally bloodied, politically bankrupt and morally corrupted, his New Labour government is now clearly in its death throes.

Yesterday’s Cabinet reshuffle may have been huge in its sweep, but its impact on the fortunes of the Government will be paltry. Cynically intended by the Prime Minister to distract attention from Labour’s local elections debacle and to give the impression of action and decisiveness, all it shows is that Mr Blair is now in panic mode.

The truth is that the government he presides over is now in meltdown. Mired by incompetence and sleaze, it is hard to see what is the point of it continuing in office.

Labour's attitude towards the electorate has become almost contemptuous: a Deputy Prime Minister who has admitted to a demeaning affair with his secretary; a Home Secretary who disgorges foreign murderers onto our streets; the cash for peerages scandal; a Health Secretary who boasts that the NHS has enjoyed its best ever year; and Tessa Jowell's mind-boggling personal finances.

Watching from the sidelines, David Cameron would not be human if the thought did not cross his mind that Number Ten now looks a realistic possibility.

The local elections were always going to be a huge test of his popularity, and the Tory leader passed with colours, if not flying, then at least hoist proudly in the air.

The Cabinet reshuffle is simply huge. Other than after a general election, Mr Blair has not moved any of the occupants of the three big offices of state - the Treasury, the Foreign and Commonwealth Office and the Home Office - unless forced to by a ministerial resignation. And when he has reshuffled the rest of the Cabinet posts, he has always considered Gordon Brown’s reaction. For him to sack one top minister, to demote another and to ignore the third - all seemingly without Brown's knowledge - is unprecedented.

Of course, Charles Clarke’s sacking as Home Secretary was inevitable, if overdue. The Prime Minister's initial defence - that the only person qualified to sort out a crisis is the one who created it - was asinine; Mr Clarke no longer had the confidence of the Labour Party, let alone of the public.

But his sacking for the foreign prisoner fiasco was not as straightforward as it should have been. A previous Labour prime minister, Clement Attlee, used to summon an incompetent minister and, barely looking up from his papers, would utter the words: 'Simply not up to the job.'

The truth is that Mr Blair should have similarly dispensed with Mr Clarke’s services. Instead, he wanted to move the man who presided over the release of foreign murderers, paedophile and rapists to another job. So it was only Mr Clarke’s refusal to accept a demotion which ensured his departure from government, not firm action by Mr Blair or any sense of propriety on Mr Clarke’s part.

Indeed, it is a measure of how out of touch Charles Clarke remains from reality that he still does not think there was any good reason for him to leave. He even took the unusual and undignified step of recording a statement in which he said that he didn't think he should been asked to leave the Home Office.

Most intriguingly, Mr Clarke’s departure removes from the fray the most likely leader of the campaign to stop Gordon Brown from becoming prime minister - making him but the latest Labour figure donning the anti-Chancellor mantle to have fallen.

Some years ago, Jack Straw carried the flame as likely challenger to Gordon Brown for the succession, but he is thought to have done a deal with the Chancellor to ensure his survival if Brown does get the top job.

Next, David Blunkett was seen as a possible ‘stop Brown’ candidate, but he destroyed his chances by his improper behaviour over his son’s nanny’s visa application. The next figure touted was former Health Secretary Alan Milburn, whose credibility was ruined by running a poor 2005 general election campaign.

Now the latest, Charles Clarke, has humiliatingly bitten the dust. Perhaps the last man to stand up to the Chancellor's inexorable passage to Number Ten is John Reid, the new Home Secretary. Poor chap.

If anything, all this just underlines the inevitability of Gordon Brown’s succession after the end of Mr Blair's lame duck administration.

As for Jack Straw, he has some reason to feel hard done by after his demotion yesterday. As Foreign Secretary, he has loyally done Mr Blair’s bidding on Iraq and in his dealings with the Americans. His reward has been the same humiliation as befell his predecessors, Robin Cook, and Sir Geoffrey Howe under Baroness Thatcher - being kicked downstairs to become Leader of the House.

But perhaps the most fascinating aspect of the reshuffle is the way Mr Blair treated Gordon Brown.

Although he must have been tempted over the years to move his brooding Chancellor, it was never an option. Had he even threatened it, Mr Blair would have been signing his immediate death warrant.

But it seems that the Prime Minister has done the next best thing - refusing to consult the man who will succeed him about the reshuffle.
Traditionally, Mr Blair is not used to reconstructing his Cabinet without a great deal of compromise. In the past, he has had to negotiate with both Mr Brown and the Deputy Prime Minister, John Prescott.

Indeed, Gordon Brown feels that it is his right to be consulted. So, after yesterday's snub, the word in Westminster is that he is particularly unhappy.

As for Prescott, he has long been regarded, even by his own fellow Cabinet ministers, as dangerously incompetent. Quite rightly, he has been stripped of all departmental responsibility.

But the fact that he retains the honorific title of Deputy Prime Minister, a seat in the Cabinet and a £134,000 salary is almost worse. At least when he had his own department, there could be the pretence that he had a job.

Now, all he has left is the honour of his title and his country house, Dorneywood.

Yet the one thing which Mr Prescott’s dishonourable and tawdry affair with a junior civil servant does not deserve is a privilege of any sort.

What kind of punishment is it to be allowed to remain Deputy Prime Minister, without having to do any departmental work?

The reason for his survival, of course, is that Mr Blair is afraid to sack him. John Prescott is a nasty piece of work. As a backbencher with a grudge against the Prime Minister, he could be lethal. And so he is allowed to remain in office.

The knock-on effect of this is that Mr Prescott’s allies, such as Ian McCartney, the former Labour Party chairman, have been booted out, and Gordon Brown has not been able to effect promotion for his own supporters.

As everyone knows, the relationship between the Chancellor and Prime Minister was already at one of its lowest points. It will now be even worse.

Today, Mr Blair has, for the first time, a Cabinet of his own choice. Once, that might have signified his strength. In truth, it signifies his weakness. The Prime Minister is not merely a lame duck; he is terminally crippled.

Thursday night’s local election results were perhaps the worst of all worlds for Labour. If they had lost more council seats – something around 400 councillors - the clamour for Tony Blair to quit would have been overwhelming.

But while losing 250 Labour councillors, from an already low base, is a terrible result, it is not sufficiently damaging to force him to leave Downing Street immediately.

So an impotent Blair is able to cling on, desperately reshuffling his Cabinet to prove to the world that he is 'in charge'.

The tragedy is that there are no new ideas for the new Cabinet to implement. And even if there were, Mr Blair would be unable to put them into effect. His supposed great legacy, the Education Bill, was hacked away at so badly to get it through the Labour backbenches that it is barely worth bothering with - and it was still only able to pass thanks to the Conservatives’ support.

At the time of the Commons vote on the bill, David Cameron was criticised for his tactics and was forced to watch the Conservatives’ opinion poll ratings beginning to stagnate. There were mild rumblings of discontent within his party at his strategy of seeming more Blairite than Blair.

But Thursday's elections represented votes of real people - and by gaining a series of councils and 40 per cent of the poll, the Tories performed at the top end of their expectations.

They still have a long way to go - the North remains a Conservative wasteland - but the Cameron strategy now looks secure. It is no longer entirely fanciful for Conservatives to contemplate a return to power.

That is doubly true with Mr Blair remaining in office. The last thing Mr Cameron wanted was Tony Blair to be forced out. A commander who is despised by his troops is a far easier target to attack than a newly installed leader, buoyed by his troops’ support.

This means that, in the short term, the real loser from both the elections and the Cabinet reshuffle is Gordon Brown. The longer his succession is delayed, the more damaged will be his inheritance and the more damaged will be Labour’s morale.

If Labour is to pull itself round, the Chancellor needs to take over soon.

With every passing day, Labour’s internal wounds grow deeper, and the Conservatives grow stronger. The electorate know that Tony Blair now stands for little bar the lame and morally bankrupt occupation of office.