It is Groundhog Day. The Labour Party seems to be stuck on a perpetual loop, reliving the worst day of its life.

Gordon Brown dithers and evades — refusing for days to say whether he supports the release of the Lockerbie bomber — then responds with a U-turn that is too little too late. A ministerial aide resigns citing lack of clear strategic direction in Afghanistan. There is tension between the Prime Minister and the Chancellor about the public finances. Damian McBride is served a writ by a Tory MP he smeared. Meanwhile, Labour backbenchers and ministers endlessly discuss how and whether to oust their leader.

Before the summer Mr Brown appeared to have seen off his critics. He survived an abortive coup by Labour backbenchers and a failed assassination attempt by the lone Cabinet gunman James Purnell. His party seemed resigned to him staying in Downing Street until the next general election — even if that meant it faced defeat.

But the Prime Minister’s handling of the Libya affair has turned frustration into despair for many MPs. Even members of the Cabinet who remain publicly loyal are privately scathing about Mr Brown’s performance in recent days. “We can’t go on like this,” says one minister. “It’s beyond difficult — it’s farcical. We’re going from one fiasco to another and Government by fiasco doesn’t work. I’ve never been a plotter but I feel total exasperation.”

Only a few weeks ago, in June, Mr Brown promised a meeting of his MPs that he would change. He said he would be more transparent, more open and more collective. “I will play to my strengths and address my weaknesses,” he told the Parliamentary Labour Party as his authority ebbed away. His humility won him a reprieve.

But, MPs complain, there has been no sign of a transformation. In fact the Prime Minister’s response to the release of Abdul Baset Ali al-Megrahi has exemplified all the familiar character flaws. “It’s been a mess beyond all telling,” says a Government aide who has been closely involved. “I suspect it will be held up as a model for future students in how not to deal with a crisis. There’s been no leadership. Gordon flounders around hoping he can get away with things. He’s just not capable of being decisive.”

A minister says there is a pattern of behaviour that could also be seen in the mishandling of the gurkhas, MPs’ expenses and the 10p tax row. “Gordon used to be rightly admired for thinking a dozen steps ahead of everybody else. Now he’s Prime Minister he is behaving like a rabbit trapped in the headlights looking which way to dash then doing it too late.”

Mr Brown’s problem is that the skills he honed in opposition — first against the Conservatives, and then against Tony Blair — are not suited to being in power. As Chancellor he was known as Macavity because, like the mystery cat, he was never at the scene of the crime. He was equally careful to avoid being pinned down politically — positioning himself simultaneously as a left-winger to the Labour Party and a free marketeer to the City. But, as new Labour discovered after 1997, triangulation is a policy for opposition not for Government. A leader has to be clear about what he believes in — and is made to take responsibility for everything that goes wrong. “Gordon’s still most comfortable with the politics of dividing lines,” says a minister, “but a leader has a mission and a duty to explain.”

It’s about character but it’s also about policy. Across Whitehall there is a lack of clarity about what Labour will stand for at the next election. Alistair Darling and Lord Mandelson have for months been urging Mr Brown to “level with the voters” about the fact that public spending will have to be squeezed in order to get the country’s finances back in order.

It is said that the Prime Minister has finally been persuaded to abandon his preferred strategy of contrasting “Labour investment” with “Tory cuts” — but he has so far refused, or been unable, to set out his position in a clear and credible way. His speech on Afghanistan last week failed to properly address the crucial issue of corruption at the elections.

“It’s obvious now that Gordon is beyond change,” says a Cabinet aide. “It’s perfectly predictable that certain things are going to go wrong but he seems incapable of preventing the disasters. The party now has to decide whether it’s possible to project his strengths or say his weaknesses outweigh his strengths.”

Before the summer another attempt to oust Mr Brown looked impossible, now it seems unlikely. One Labour adviser puts it at 60/40 against — although he says: “Gordon is threatening the party with a landslide defeat it doesn’t deserve.” On the backbenches MPs are starting to think about their survival. Jon Cruddas, the champion of the Left, rails against a party “meekly accepting defeat”. A former Cabinet minister says Mr Brown has a “moral responsibility” to put his party’s future before his own.

What is clear is that Labour is disintegrating as it lurches towards electoral disaster. Mr Brown’s top table is now, as one insider put it a “Cabinet of individuals” rather than a united team — it was telling that Jack Straw, Labour’s wiliest operator, was not afraid to drop the Prime Minister in it by last week letting it be known that he kept No 10 fully informed about the Libyan case. “The odds are still against the Cabinet moving against Gordon but it’s got to the point where I can’t be certain that people wouldn’t do something,” says one minister. “Things are much more febrile than I expected.”

At the start of the last conference season before the general election, a crucial moment for Mr Brown, support for the Prime Minister is at best lukewarm. “Gordon isn’t performing well — you’d have to be a lunatic to think he was,” says a Cabinet adviser. “But we have to ask what do we do about it? The chances are that we will muddle on.” It’s not exactly a ringing endorsement.

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