I always enjoy a good funeral,” a Labour MP said as he wandered along the seafront in Brighton. If the polls are to be believed, Gordon Brown is dead and the Government is on the verge of being buried — but is the Labour Party itself also heading for the grave?

In public, at the last conference before a general election, ministers talk of nothing but a “fightback”. Yesterday Lord Mandelson won a standing ovation by telling delegates: “If I can come back we can come back.” Today the Prime Minister will no doubt be cheered to the rafters as he tells the party that even underdogs can have a vigorous bite.

But in private there is an overwhelming sense of doom. “It’s catastrophic,” a former Cabinet minister says. “If we lose the election we’ll be out of power for a generation.” Another claims: “Labour really could be finished as a force in British politics.”

Such apocalyptic rhetoric may be excessive, but what is certainly true is that, for all the talk of leadership plots and dignified exits, White House snubs and prescription drugs, this is no longer just about the future of the Prime Minister — it is also about the future of the party that he leads.

In the German federal election this week, the centre-left SPD won only 23 per cent (coincidentally, the same figure that Labour got in this country in an opinion poll on the same day) while the left-wing Die Linke party got 12 per cent of the vote. As Angela Merkel puts the finishing touches to her centre-right coalition it is clear that a recession caused by the failings of capitalism will not produce an automatic shift to the Left. There is, according to Denis MacShane, the former Foreign Office minister, an “existential crisis” on the centre left across Europe.

In this country Labour is wobbling as it becomes increasingly financially dependent on the trade unions and its support base shrinks to a core vote. After more than a decade in power, the coalition of working and middle-class voters that swept it to victory in 1997 is fracturing. “We’ve lost the middle classes,” says a Downing Street aide, “and we know we’ve got to win them back.”

Today Mr Brown will make his pitch to Middle England with a promise to do more to tackle antisocial behaviour — part of the Blair agenda that he deliberately sidelined when he first moved into No 10. He is focusing on what he recently called the “squeezed middle” because he knows that the aspirational voters who supported Tony Blair have turned away from him. But the phrase he has chosen is telling: Gordon is interested in the middle classes only if he thinks they are “squeezed” — and therefore joining the ranks of the poor who have concerned him most for all his life. These voters want to feel loved when they are comfortable too. And as they see their taxes rise, as they battle with a schools system that puts equality above excellence, as they find themselves compared to paedophiles if they drive a group of children to a swimming class, they feel increasingly that Labour disapproves of them.

Somehow the Government has also managed to alienate the hard-working families it claims to represent, from the dinner lady fired for reporting bullies to the policewomen who cannot babysit for each other’s child unless they join a childminders register.

If Labour returns to “class war” against David Cameron, as some are suggesting, that impression will be further reinforced.

A No 10 aide admits that Mr Brown does not have the natural empathy with the middle classes that Mr Blair did. “The moment Tony sent his son to the Oratory those voters thought — ‘he gets it’,” he says. “Gordon wouldn’t understand that. He knows that he has to reassure Middle England but he’s not part of it.”

A minister once told me that Mr Brown doesn’t understand the “conservatory-building classes” — in fact, Brownites insist, the Prime Minister has a conservatory attached to his Scottish home. But he didn’t build it and it is filled from floor to ceiling with books. When Mr Blair spoke of the many, not the few he meant the middle classes; when Mr Brown used the same phrase he was referring to the poor.

Lord Mandelson declared yesterday that the next election will be a “change election”: “either we offer it or the British public will turn to others who say that they do,” he told the conference as he said that the party needed to embrace “new reform, new policies and new thinking”. He is right.

On the fringe in Brighton, however, there are endless calls for the party to return to its left-wing roots, rejecting market ideas and spending cuts. If Labour loses power it will almost certainly go back to its comfort zone.

“The party will say to the modernisers: you’ve had your chance and you blew it,” a Cabinet minister. says. “Now let us follow our heart.”

The coalition that is now fracturing would then be destroyed. Labour tolerated Mr Blair and his election-winning ideas — but never really loved them.

“For the party Tony was necessary, but he wasn’t right,” says a Cabinet ally of the former Prime Minister.

It’s as if the Labour Party had been colonised for a decade by a foreign invader and is not quite sure how to behave now that it has its independence back. Perhaps Lord Mandelson remains so loyal to Mr Bown because he is suffering from post-colonial guilt.

A few years ago I visited the ancient Inca capital of Cuzco in Peru. The buildings are a curious hybrid: the bottom halves are made up of huge round boulders, laid by the Incas — but on top balance spindly wooden balconies built by the Spanish conquistadors. For me it symbolised the identity crisis of a former colony. Labour has a similar identity crisis. It knows it can’t return to the old Labour boulders, but it doesn’t really like the new Labour balconies — so it has absolutely no idea how to construct a roof.

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