The family, a Blairite Cabinet minister says, is back together again. Alan Milburn is the latest prodigal son to return to the fold. Alastair Campbell is being wooed with a peerage. Peter Mandelson is Gordon Brown's new/old best friend. Charles Clarke and David Blunkett are tipped for a comeback to the Labour front line.

But this is like one of those awkward Christmas gatherings where everything is fine so long as certain subjects are avoided. There must be no mention of Great-uncle Tony's legacy, or Grandfather Gordon's psychological flaws. It is best not to talk of “choice” in the public services or to question the role of the State.

So long as the family is faced by an immediate crisis - the recession - peace will be upheld. The enemy without is greater than the enemy within. But beneath the surface the tensions simmer. If the voters start to turn against Labour - as the latest Times poll indicates they could - then the disagreements will emerge.

Certainly, the personalities are symbolic - by inviting the Blairite praetorian guard to join his army, Mr Brown is seeking to demonstrate an end to the great divide of the TB-GB years. But it is the policies that really matter. And on the substance differences remain. It is no coincidence that the courtship between Mr Brown and Mr Milburn lasted so long. At least one meeting last year ended in a row. Even now, the former Health Secretary is only half in the Downing Street tent - he has agreed to head a commission on social mobility, but turned down a Cabinet job. Perhaps he thought that he would struggle with collective responsibility. On schools reform, health policy and local taxation he disagrees profoundly with some of his colleagues - and possibly with Mr Brown - about what Labour needs to do to improve the life chances of the poorest people in society - and its own hopes of retaining power.

The self-described “Billy Elliot” of politics, who was raised by a single mother on a council estate in a mining village, Mr Milburn has long been passionate about social mobility. For the past two years he has been setting out in some detail his views on how to lower the barriers between rich and poor. This is not, of course, just about opening access to the professions - the official theme of his review. Nor is it, as some Labour MPs would like, a class war - something that the former Health Secretary detests. In one area of policy after another, he has advocated a “new relationship” between the individual and the State. It is, in his view, patronising of middle-class politicians to assume that working-class voters have no desire or ability to better themselves. He wants to give parents and patients (rich or poor) greater power over the public services they use. His only problem with Tony Blair's market reforms was that they were not radical enough.

On education (which is the key to social mobility, far more than whether or not somebody is able to do work experience at a law firm), Mr Milburn supports the Conservatives' idea of free schools, run by charities or companies rather than local education authorities. But he is willing to go farther than the Tory spokesman, Michael Gove. His proposal is for parents of pupils in badly performing schools to be given an “education credit” - a voucher by another name - that could be spent in any school of their choice. Crucially the credit would be worth 150 per cent of the cost of educating the child as an incentive to the alternative (presumably better) school to make a place available.

More generally, Mr Milburn wants power to be transferred from Whitehall and town halls to local people. Taxes should, in his view, be raised locally wherever possible - with referendums in each area to determine rates. Community groups should run parks, housing estates and childcare centres. Hospitals, schools and councils should be paid by results, with the public given a greater say on policy through elected police chiefs and health authorities. Patients with chronic conditions, and elderly people, should have individual budgets that they would use to pay for care in either the public or the private sector. Choice remains a buzzword.

What makes this so potentially explosive is that it is all linked in Mr Milburn's mind to his remit of improving social mobility. “The challenges of the modern world call for the State to play its part but also to know its place,” he said in a speech last September. “Just as the global credit crunch has exposed the limits of untrammelled free markets, so the entrenched problems of social exclusion in so many communities and unfilled potential among so many of our citizens expose the limits of centralised state action.”

The question is - does the Prime Minister agree? It was after all the role of the centralised State that caused the original falling out between Mr Brown and Mr Milburn six years ago - when the Chancellor at the time sent a lengthy briefing paper to the whole Cabinet, arguing against the plan for semi independent foundation hospitals. Around the same time, he made a speech arguing that there were “limits to the market” in the public services - a starkly different tone to the one taken by Mr Milburn at the time.

Since moving into No10 Mr Brown has consistently played down the use of “choice” in the public services, and his ally Ed Balls, the Schools Secretary, has ensured that city academies remain firmly under the control of local authorities. Indeed there is a sense in which the Prime Minister is dealing with the economic downturn so confidently partly because it requires greater state intervention - something with which he is instinctively comfortable.

It may all look cosy in the Labour tribe for now. But there is almost certainly trouble ahead. Tolstoy's opening line of Anna Karenina applies to politics: “Happy families are all alike; every unhappy family is unhappy in its own way.”

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