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Put aside the insults for a second - Cameron attacking Brown for putting political calculations ahead of the national interest and Brown attacking Cameron as a shallow salesman who never addresses the substance of issues - and generated a revealing preview of the great debate to come on extending detention without trial.

Gordon Brown's now boiled his case down to the precautionary argument - legislate at leisure now instead of in a panic during a terrorist emergency.

David Cameron's reply is that he agrees with the director of public prosecutions and the former attorney general and lord chancellor that there's no evidence of a need to extend detention without trial to 42 days.

Unlike on the 10p tax, the PM knows that the public is, largely, on his side on this one. He must hope that by being seen to press ahead in the face of possible defeat it will reinforce his message that he is doing what's right in the public interest rather than worrying about "headlines and gimmicks." David Cameron cannot, even if he wanted to, back off so the stakes are high - not just in terms of our national security but in the political positioning of these two men.

After and the , the vote on 42 days is likely to be the next big defining moment in the struggle between these two men.

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What, Nicky Campbell asked the prime minister, was the first thing you thought of this morning. Gordon Brown answered, as Nicky knew he would, with a list of the things he could do to protect us all from the credit crunch. The presenter of 5 Live's Breakfast programme quipped that listeners may have expected a more "human answer" before suggesting that people found "the lack of connection" difficult.

This exchange summed up the agony confronting the prime minister. He believes that he's taking "the right long term decision for Britain" but constantly finds himself quizzed as if he's in a psychiatrist's chair.

Gordon loathes talking about himself which seems merely to fuel the media's delight in doing just that. Whether you are on his or their side, the prime minister needs to find a way to move the national conversation away from himself to the things that he's doing in the job. Listening to questions - whether about the Olympic opening ceremony, or the 10p tax rate or what he does first thing in the morning - and answering them in fluent human is vital if he is to achieve that.

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Alistair Darling will move this morning to try to clear up doubts about whether the Treasury will backdate all the compensation payments they're promising losers from scrapping the 10p tax rate. These doubts - fuelled by the chief secretary's performance on Newsnight last night (which you can watch here) - have already caused rebels who'd been won over to be roused once more.

When he faces Treasury Questions this morning, Alistair Darling will tell MPs that he meant what he wrote in to the chairman of the Treasury select committee - ie that pensioners will get backdated payments whereas in the case of other groups the "average loss" will be "offset" (see the text below). In plain English, this appears to mean that pensioners are likely to get backdated winter fuel payments. In the case of low paid families, they may get increased tax credits even if they have no children. What isn't at all plain is how this can be done. Tax credits cannot, the Treasury told us yesterday, be backdated.

I suspect MPs will want some more clarification and more assurances.

Extract of letter from Alistair Darling to John McFall:

"As a sign of the Government's intent, we do not wish to wait unnecessarily until November. Whatever conclusions we come to, all the changes will be backdated to the start of this financial year.

"For other low-paid families currently outside the working tax credit system, while we will examine in our review all practical propositions, our focus is on potential changes to the tax credits system to allow the average losses from the removal of the 10p starting rate of income tax to be offset."

UPDATE, 12:00PM: Below is what Alistair Darling said in the Commons. I'm not sure it moves us on much so Labour MPs will have to decide whether to trust him or whether to table an amendment obliging him to stick to the "backdating" deal they made behind the scenes.

"I set out in a letter to the chairman of the Treasury select committee how I proposed to proceed, both in relation to a specific group - that is, people over the age of 60, between 60 and 64, whose incomes don't change that much, and for whom there is a readily available mechanism to make additional payments through the winter fuel payment. And in relation to everybody else who's affected, I said that there were certain areas that I wanted to look at, in relation to tax credits, the national minimum wage, and I said that I would be setting out proposals and return to it at the pre-Budget report. That's what I said at the weekend; that's what I said in the letter to the Treasury select committee, and the letter set out quite clearly how I intend to proceed."

UPDATE, 13:15PM: The chancellor does now seem to have reassured most on his backbenches that he will be offsetting average losses THIS YEAR - the addition of those two words may be enough to prevent this row from flaring up again.

Odd that it took so long for the Treasury to get its U-turn understood.

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I have just been interviewing the prime minister in Downing Street about his . He insists that he had 'not been pushed around' and had stuck to his policy of scrapping the 10p tax rate. This, he said again and again and again, was the right long term policy for Britain.

Mr Brown said he had 'listened' to people's concerns about the impact on certain groups, particularly in more difficult economic times. He went on to make clear that the cost of the compensation package hinted at today would be substantially lower than ÂŁ1bn. He accepted that not all those who've lost from the 10p tax rate cut would benefit. Not all losers, indeed most of them he believes, are anything like poor.

When I put it to him that Labour MPs might conclude that if they " he'd cave in", he denied that and insisted that he would stick to the other policy proposal which Labour whips have warned him he may lose - to to 42 days.

I could sense his frustration about the position he now finds himself in. He still believes that his last Budget as chancellor was right and fair; that the number of poor people who lose has been exaggerated; that he's only made a minor change to his policy, costing a relatively small sum of money. And, finally, he is outraged at being by the Conservative party.

Nevertheless, deep down, he must know that this political mess is largely of his own making.

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Westminster is still echoing to the sound of screeching political tyres. The prime minister has performed a .

No, he has not restored the 10p tax rate.

No, he is not individually compensating every loser.

No, not everyone will benefit from the changes announced today.

But Gordon Brown had shouted down those who told him there were many, many losers from his last Budget as chancellor and those who told him he faced a real political crisis as a result.

Today he has admitted that they were right and been forced to promise backdated measures to help 60 to 65-year-olds, childless couples and the young who don't benefit from the full minimum wage.

So, yes, this is a U-turn forced by the threat of a Commons defeat.

This is a humiliation he will have hated.

However, before everyone starts to write the prime minister's obituary remember that the public care much less about U-turns than the political classes; voters care whether what's done is right or wrong, not whether it's different from what was promised before.

Gordon Brown looked freer at PMQs than I have ever seen him as he fiercely defended his anti-poverty credentials and attacked the Tories for their cheek in daring to take him on on this territory.

Tony Blair's U-turn to back a referendum on the EU constitution did him little damage. Gordon Brown's problem is that, unlike Blair, he does not have a reputation as a strong leader but as a ditherer who blinks in the face of defeat. In as much as this episode confirms that view, in voters' minds it will do him real harm.

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In a significant government U-turn, the government is now promising to compensate those pensioners and young people who have lost money as a result of the abolition of the 10p tax rate.

In a written statement to the Commons, the chancellor makes clear that the Treasury will assess the average loss of pensioners aged between 60 and 64 and childless working people before announcing what he will do in his pre-Budget report this autumn. He also makes clear that whatever measures are taken will be backdated to the beginning of the tax year.

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Well well. There's nothing like Prime Minister's Questions to focus the mind. Question One today is from Labour backbencher who has told the whips that she will not support the Budget unless there is help for the 10p losers this financial year.

To ease the PM's pain, the chancellor will - any minute - be issuing a written statement which will, we're told, "flesh out" his promise to his MPs that he'll "revisit" the issue in the pre-Budget report and the Budget.

Watch this space.

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Labour MPs were delighted to hear last night that Gordon Brown "gets it" (at last) when it comes to their concerns on the 10p tax rate. Now they want to know what those of their constituents who've lost out will get and when they'll get it.

Day by day, hour by hour the government's position is shifting. First there was denial that there was a problem; then came acceptance that it had to be looked at; next followed a promise that the Treasury work programme for the next Budget would be amended to include consideration of childless households; now we learn that the Treasury select committee is to hold a swift inquiry into who's lost out and what can be done to compensate them.

"So what?" you may ask. Well, the select committee is chaired by Labour's who, though his own man, is close to Alastair Darling. What's more his report will come out before the final Commons vote (the Report Stage) on the Budget. Thus, rebel MPs can be told that before the Bill passes into law - but, conveniently, after next week's local elections - they will get a chance to study an independent study into the losers and how to compensate them and, indeed, to the government's response. They can reserve their right to rebel until then but not give the Tories the humiliating defeat for Gordon Brown which they crave.

This, in itself, will not ensure that the losers "get it" nor when they get it. However, it does put flesh on the bones of the Treasury promise (which I wrote about yesterday) to give MPs both a "process and a timetable" for dealing with the 10p tax problem. My hunch is that it's likely to ensure that the government "gets it" - the vote, that is - although there will be some hard bargaining between now and next Monday's vote.

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The government is about to spell out "a process and a timetable" for dealing with those who have lost out from the abolition of the 10p tax rate. When the Chief Secretary of the Treasury, Yvette Cooper, opens the debate on the Second Reading of the Finance Bill this afternoon she will announce that an existing Treasury inquiry into how to help poor households with children will be expanded to include those without children. The inquiry was announced in the Budget and is due to report by the time of the Pre-Budget Report this autumn.

This proposal will also be presented to the Parliamentary Labour Party meeting this evening. Harriet Harman is due to speak but her place could be taken by a more senior minister perhaps even the prime minister himself.

Senior government sources say that ministers cannot afford to make changes now but would if they could. Therefore, Labour MPs will face the choice of either voting with the government or against it and defeating the entire Budget. Such a defeat would, sources say, be regarded as equivalent to a vote of confidence.

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Canaries, you no doubt recall, used to be taken down pits to detect noxious gases. If the miners' yellow long feathered friends so much as twitched, trouble lay ahead. If they fell off their perches and dropped to the bottom of their cage, the miners knew they were done for if they didn't get out fast.

The Labour Party now has its own canaries who work in a somewhat different way to those in the mines. To test the health of the party you look at how and whether they can survive together. The odd squabble and pulling out of feathers, means everything's OK. If, however, they peck each other to death, the party looks doomed.

Given the behaviour of Labour's canaries over the last few days, the party ought to be worried.

The canaries in question are:

The backbench MP who has described the 10p tax revolt as his party's "poll tax moment" - .

The minister who's warned about the "indulgent nonsense" of "private briefings against the Labour leader" - .

And the former minister who, in , warns Balls that his actions "take us back to the days of faction fighting and party-within-a-party that were so damaging in the 1980s" - .

Why do I pick out these three? Because, despite their differences, they can often be found together watching their favourite football team, Norwich City - known to its fans as the Canaries. I, for one, will be watching hard in the next few days to see whether they can bring themselves to behave as if they're on the same side.

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Gordon Brown will today evoke the memory of President John F Kennedy. Standing in the Kennedy library beside his brother Teddy. The prime minister will echo JFK's global call for inter-dependence. He will praise American leadership after World War II and in the Cold War and argue that it is needed again to reform global institutions to tackle problems that are themselves global in scale. The prime minister's aides say that his speech today is a letter to America written at a time when it is ready to re-engage with the world. Mr Brown believes that George Bush has abandoned the isolationism of his first term in office and that whoever succeeds him will go much further still.

I've been speaking to Henry Kissinger, John Bolton, Sir Christopher Meyer and Robin Niblett - the director of - about today's speech for a report on the Today programme which you can hear here.

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Today the Prime Minister - a meeting that is likely to be of more consequence in the long run than his meeting with the current occupant of the White House. Which of the three senators - Obama, Clinton and McCain - will make it to the Oval Office Gordon Brown cannot know. However, he does know that the relationship he forms with them will be vital and could have huge consequences for him and for Britain.

Gordon Brown has known Hillary Clinton for years. . He has, though, never met his first visitor at the British Ambassador's residence today - Barack Obama. How and whether they get on will matter at least as much as any issue they discuss.

Who should he want to win? He won't, of course, give so much as a hint.

would be a comfortable choice for Gordon Brown. He knows her, her husband and many of those who surround them after the long years in which New Labour worked closely with New Democrats.

would, on the other hand, embody a significant break with the Bush years. A man with African parentage who was brought up in Indonesia would be well placed to convince the world that the US could and would take seriously global poverty and a dialogue with the Muslim world.

However, there are a series of reasons why might represent the best choice for Gordon Brown. He is more of an Anglophile (or, if you prefer, a Britophile); more an Atlanticist; more committed to free trade and much more predictable in his attitudes to Iraq and Afghanistan. Besides, a McCain victory would prove that age and experience could triumph over youth or novelty.

Gordon Brown has no vote, of course, but it would be fascinating to know who he'd choose after meeting them all one by one today.

PS. I spent last night in "The Spin Room" at the latest debate to pit Hillary Clinton against Barack Obama.

PPS. I know many of you have had trouble submitting comments in the past well from today the ±«Óătv has upgraded its blogging software so now it should be more reliable. From today if you want to comment on any ±«Óătv blog you will need to register first. You can read more about this on the Editors blog.

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NEW YORK: I've just woken to the sight of a grinning and understandably awkward Gordon Brown staring out of my hotel TV screen.

ABC's Good Morning America is trailing their interview with him by asking whether he backed Obama's call to pull out of Iraq asap or McCain's to stay a 100 years. I can't wait to see how he answers. Breakfast will have to wait...

UPDATE, 15:00 BST: Surprise, surprise. The PM sought to avoid choosing between Obama and McCain's Iraq strategy saying on the one hand that Britain has "been able to prove that you can draw down (troop) numbers" (a quote Obama will welcome) and, on the other that, troop numbers must be determined by events on the ground (more to McCain's tastes).

More memorable was the PM reminding an American audience that he'd worked with Tony Blair for 25 years and telling them that he loved America.

Attention now moves to the UN Security Council session on Africa where Zimbabwe is not formally on the agenda. South Africa's President Mbeki has just cancelled his bilateral with Mr Brown - presumably because he doesn't want it on the informal agenda either.

PS. Apologies, but from 1800 BST tonight, there's going to be some essential work carried out on all of the ±«Óătv's blogs including this one. It means that you won't be able to comment on any blog posts from then until early Thursday morning. You can read more about this on the Editors' blog.

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NEW YORK: It is a visit like no other. It is the talk of the town. It's the moment the president himself has talked excitedly about.

No, no not the arrival stateside of Gordon Brown. The Pope is in town.

Hours after the pontiff was , the prime minister slipped into New York almost unnoticed. Like so many visitors to this city he may well struggle to get noticed

Congressman , an Anglophile who's a member of the UK/US caucus, told me that “He's unlucky… the Pope has removed all of the oxygen from the system.”

So much so that when CBS news ran an interview with the prime minister this week they felt the need to remind their viewers who he was telling viewers that "He's known as the stern Scotsman who rarely smiles. For a decade Gordon Brown was the serious partner in an unlikely political pairing while the affable Tony Blair served as prime minister…”

Now Americans certainly know who HE is. Our man in Washington for much of the time Blair was prime minister was who says that “Gordon Brown didn't open his account when he first travelled to see George W. in a particularly successful or auspicious way. So the ambassador in Washington I think will have to work hard, much harder than I ever had to do… because he (Blair) was self-selling… Gordon Brown I think will need some more work."

British officials are trying hard to hide their disappointment that the prime minister is not so much sharing the stage with the pontiff as being shoved into the wings. No, they say, THEY didn't know about the clash when the White House suggested the date for their man's visit.

However, they insist, headlines are far from the only test of this trip. What matters is this message which Gordon Brown has brought with him telling CBS that "European nations want a better relationship with America and I feel I can bring Europe and America closer together for the future. And that's going to be to the advantage of all of us."

That sounds like a Brown-ite version of that Blair-ite offer to be a bridge between Europe and America. A bridge destroyed by the war in Iraq. Brown senses that whether this country plumps for John McCain, Barak Obama or Hillary Clinton - all of whom he'll meet on Thursday - there will be a desire for America to re-engage with the world on climate change, global poverty and much besides.

of the influential agrees. He told me that "Gordon Brown is being very smart. I think he understands that he'll have an opportunity to help, and shape and guide and really influence the next American president.”

Gordon Brown will press his case for the reform of institutions like the UN, and the World Bank and the IMF to cope with the new challenges of the new world. On Friday he will set out a foreign policy vision with echoes of the young President Kennedy in a lecture which his advisers have dubbed “A letter to America”. Congressman Kirk told me that he sees a fundamental problem with that. “You can't write a letter to America unless Americans know who you are” he says before adding “at this point they don't know who he is. This prime minister has an extremely low profile in the United States. He hasn't done or said anything that the American public have noticed too much.”

Thanks to the Pope and the , few Americans will learn who Gordon Brown is on this visit. Never mind, a prominent Brit has got the place pretty much to himself next week. In fact, he'll be being given an award for his services to transatlantic relations. His name (don't tell Gordon) is Tony Blair.

This is a version of my report on the Today programme this morning.

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WASHINGTON DC: Tony Blair risked alienating the rest of Europe with his claim that Britain and, let's be honest, he personally could act as a "bridge" between Europe and the US. If that was ever true the Iraq war broke the bridge.

Well, what do you know? Last night on US television Gordon Brown reopened it by claiming on CBS news that:

"I feel I can bring Europe and America closer together for the future. And that's going to be to the advantage of all of us."

What's more he reasserted that the relationship between the US and UK is "special". A hotly denied recently that the British ambassador to the USA had banned the hackneyed phrase but, talking to CBS's Katie Couric, the PM has restored it and added a "very":

Katie Couric: "Finally Mr Prime Minister, ideally, what would you like the American people to know about you?"

Gordon Brown: "That I'm very pro-American and I've always been so. I feel America and Europe, and America and Britain in particular, because ours is a very special relationship, I feel that America and Britain can achieve so much in the next few years."

No prime minister can, it seems, resist the temptation to argue that Britain alone is capable of guiding America to do right by the world.

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Sell. Sell Browns. Sell them now. The message coming from the political trading floor couldn't be clearer. Shares in the prime minister are falling about as fast as shares once did in Northern Rock.

Staff working for Brown and Company are said to be revolting - ministers are reported to have been threatening to punch one another, MPs to have defied the boss to his face and his own team don't get along. That new man in PR - Carter's the name - has been upsetting the old guard who don't like who he's hired and fired and don't know what on earth he knows about their business anyway.

What's more, the shareholders - for the purpose of this extended metaphor, that's you and me - are soon to get a chance to vote on how things are going (at least you are if you live in the large parts of England and all of Wales where there are soon to be local elections). In the political marketplace, the results have already been discounted. Thus, the buyers and sellers of political fortunes have already begun to discuss what will happen WHEN not IF Labour loses. And thus, the papers are already filling with talk of stalking horses and runners and riders for a leadership race which has not and, almost certainly will not, begin.

This frenzy of gossip and speculation in the political marketplace is, of course, being driven by the mood in the REAL marketplace which is reeling from what's now officially described as "the worst financial crisis since the Great Depression". The gloomier the economic news has become, the more Brown's ratings have slid and the more the talk of a crisis for him has grown.

And how has he responded? With a massive gamble. Gordon Brown is betting his house - or at least the one he currently occupies at No 10 - on his belief that things aren't as bad as they seem or as many predict they will be. As evidence, he points to last week's little reported prediction by the IMF that even though economic growth will slow in Britain, it will be higher than in all the other industrialised economies. He believes that there's time between now and the next time voters get to choose a government to be proved right and that those who've gambled on bust following boom will, once again, be proved wrong.

And, who knows, he may well be right but he may, also, be too late. For in the political world, just as in the financial, markets can take on a life of their own. Or, as one senior cabinet figure put it to me, "the danger we face is that we are just too damaged to recover". Even Gordon Brown's own allies are now restlessly waiting for him to do something to halt the slide. Imminent and avoidable rows on and will hardly help. They will not wait for ever.

PS. I'm heading to America today to report on a vital week for the prime minister who'll be having talks with the bankers of Wall Street on the reform of the international finance system; at the UN on what to do next about Zimbabwe; at the White House about the economy, Iraq and Iran; with the contenders to replace George Bush and he'll be delivering an important lecture on his approach to foreign policy.

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Gordon Brown is cross. Very cross. Accusations of dithering hurt at any time but this week's jibe that he deserves the gold medal for dithering didn't just hurt, it infuriated the prime minister. Not simply because it was not true that he'd dithered about whether to go to the Olympics but also because he has been clear and consistent about the need to engage positively with China however distasteful some may find it and whatever the political cost.

That cost was captured in a single image - of the men in blue tracksuits, who Lord Coe has dubbed Chinese thugs, muscling their way up Downing Street as the tenant of No 10 looked on trapped, or so it seemed, between a desire not to be too closely associated with what was happening and his inability to pull out altogether.

His plight is explained, or so conventional wisdom has it, by the fact that Britain, as the next host of the Olympics, must cosy up to the Chinese. Also, by the desire of a canny ex-chancellor to tap in to China's huge wealth at a time when money is tight. There is something in both these explanations but there is another just as significant and much less familiar.

Brown believes that China must be coaxed into becoming an active member of what he calls "the global society". In other words, he believes that Chinese involvement is needed to solve many of the world's most pressing problems -whether climate change or Darfur. What's more, he fears that Communist hardliners will be strengthened if the Olympics lead to China losing face rather than seeing the benefits of opening up to the world.

This has been re-inforced by the bond that has been formed between the prime minister and his opposite number - Premier Wen. Brown and Wen are similar characters - both are praised for their seriousness and derided for their lack of charisma. The two men appeared together recently at what was dubbed Communist China's first ever town hall meeting. Those of us who attended mocked the stage-managed questions from hand-picked party loyalists. Gordon Brown rebuked us for missing the point - a Communist apparatchik was taking the risk of opening himself to questioning without relying on a script. Wen was putting a small toe into democratic waters.

Team Brown insists that this relationship has not come at the expense of putting pressure on the Chinese over human rights or Darfur or Burma. Indeed, they point to a series of small positive steps taken by the Chinese after Brown's visit. As for Tibet they point out that Brown is to meet the Dalai Lama and has called for a dialogue with Tibet's spiritual leader whilst avoiding the furious row provoked by Germany's Angela Merkl when she did the same but without first informing Beijing.

Treading carefully around Chinese sensibilities may play well in Beijing but it plays much less well at home. Ensuring that the Chinese don't lose face has led Gordon Brown to lose it instead. He knows this but has never dithered over what he believes is not just in Britain's but in the wider world's interests - the need to embrace the dragon.

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Downing Street sources insist that the Chinese government were never in any doubt that Gordon Brown intended to attend the closing ceremony of the Olympic Games. They say that the prime minister made this clear to China's Premier Wen when they met recently in Beijing. What's more, a letter sent by China's ambassador to London on the 5th of April informs No 10 that the Chinese premier was looking forward to welcoming the PM at the closing ceremony.

The plan, they insist (and the back this up), was always for Brown and the mayor of London to go the closing ceremony and Princess Anne and the Olympics Minister, Tessa Jowell, to go to the opening ceremony. Maybe, but that's not the impression they created right around the world.

It was explicitly stated in China's official agency reports on several occasions that Brown was going to the opening ceremony. Xinhua is not known for its Downing Street sources. It gets its information from the Chinese government.

British newspapers have repeatedly reported calls for Brown to abandon plans to attend the opening ceremony.

Last night Hillary Clinton praised her friend for boycotting the opening ceremony.

Sources claim that the public confusion about Mr Brown's plans stems from the fact that he regarded the only important question as being whether countries boycotted the Games or not - whether that be this or that ceremony or, indeed, the Games themselves. The PM feared that an answer pointing out that he wasn't, in fact, planning to go to one ceremony but was planning to go to another would look like he was trying to have it both ways.

He spotted the right danger but made a huge miscalculation about how to avoid it.

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Good grief.

Gordon Brown has not performed an Olympic U-turn but, thanks to his and his team's cack handedness, it looks to the world as if he has.

I am now clear that the prime minister was never planning to attend the Olympic opening ceremony. It was always his intention to go to the closing ceremony to receive the Olympic torch on behalf of London. Britain was to have been represented at the opening ceremony by the Olympics Minister, Tessa Jowell.

Why do I state this so confidently? Journalists planning to travel to Beijing with the PM tell me that Downing Street told them this some weeks ago. I am not, as it happens, one of those making that trip and so, like most people, thought that the PM was planning to go to the opening ceremony whether other leaders boycotted it or not.

The problem for Team Brown is that he and they have never stated clearly and publicly their man's position. Thus they stand accused of making a U-turn in the face of public pressure when, it would appear, they have done no such thing. They have, however, been guilty - once again - of an utterly avoidable PR own goal.

Downing Street says that the PM's position was made clear at a lobby briefing on 19 March. Here's the official note of what was said:

"Asked if we now agreed with the French foreign secretary that there was now a case for not attending the Olympic opening ceremony, the PMS (prime minister's spokesman) replied that our position in relation to the Olympics had not changed, and we did not support a boycott of the Olympics.

Asked if it was still the prime minister's plan to attend the closing ceremony of the Beijing Olympics, the PMS replied that this was correct"

At Gordon Brown's recent news conference with France's President Sarkozy the two leaders were asked

Q : "Should the leaders of major democracies like Britain and France now boycott the opening ceremony in Beijing as a result of what is going on in Tibet?"

Sarkozy : "At the time of the opening ceremony, I will have assumed the presidency of the EU, so I have to sound out and consult my fellow members to see whether or not we should boycott"

Brown : "We will not be boycotting the Olympic Games; Britain will be attending the Olympic Games ceremonies"

Note the plural – ceremonies. It is now clear what was being said however cryptically. It was far from clear, though, to those who were not in the know. Indeed, a quick cuttings search reveals that major national newspapers stated again and again in recent weeks that the PM was indeed attending the opening ceremony.

Was it a tactical decision to be cryptic? An attempt to avoid a story? An effort not to upset the Chinese? Or was it simply that Team Brown genuinely thought everyone knew? Or a mix of all the above ?

I wish I knew...

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The IMF may have revised its forecasts but the . No surprise there given that if he had revised them just a month after his that would send economic confidence into a nosedive.

The government's case that the dip in the housing market is, as the prime minister told me yesterday, "containable" is based on comparing the so-called fundamentals of today with those of the early 90s - employment, inflation, interest rates are all in far better shape. Those who are much less sanguine are, though, making a different comparison - with the economy of the United States. They are arguing that, like the US, our economy is particularly vulnerable to problems in the financial markets.

You pay your money and you make your…

Meantime, there is an interesting debate being led by the two shadow chancellors about reforming the financial system to avoid a similar crisis in the future. Robert Peston wrote about the Tory proposals on his blog yesterday and Vince Cable's . Both men talk of getting the Bank of England to take credit conditions into account and not just inflation when setting interest rates. When I asked Gordon Brown about this he appeared torn between wanting to diss an idea coming from his opponents and not wanting to rule out something he may yet want to embrace. There is some debate behind the scenes, I'm told, about whether the Bank can make this change itself or whether it needs the Treasury to set it a slightly different target. Either way, it represents an important break with the long consensus between Labour and the Tories that appeared to think that the City could do no wrong.

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I’ve just been talking to the prime minister in the cabinet room about the latest grim news on house prices and the state of the British economy (which you can watch here).

Gordon Brown is refusing to look or sound gloomy. After the huge rises in house prices in recent years he says that a 2.5% fall is not – in itself – a problem. The key, he insists, is whether it and the other problems caused by the global credit crunch can be contained. He is careful not to predict that Britain will weather the storm but rejects suggestions that he is “in denial” about the state of the British economy.

I also asked him about:

• the Olympic torch fiasco – it was worse in Paris he says and denies that he’s pulling his punches on human rights because Britain needs Chinese money.

• Zimbabwe - he calls once again for the election results to be published.

• the Diana inquest - he declares that it is time to draw a line and says that the time of the intelligence services should not be wasted by looking at these allegations of conspiracy again.

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There was always going to come a moment when all the talk about the credit crunch, the liquidity crisis and our old friend Northern Rock suddenly hit home for people who don't spend their lives studying the financial pages. Today is, I suspect, that moment.

The Halifax's announcement that since the housing crash of the early 1990s will force many people to stop, pause and gulp. The optimists will say that things now are nothing like they were then. Inflation is not out of control. Interest rates are being cut, not raised. The economy is still growing. As Labour's canny former deputy chief whip, George Mudie, , "Well, fine, but that is history". He went on to quote Lloyd George 'You can't feed the hungry on statistics of national prosperity'.

Things, to coin a phrase, can only get worse - at least in the short run. These stats came before the lenders began to refuse mortgages to people they'd previously begged to take them. The FT has reported that because buyers cannot get the mortgage they need.

The question is what, if anything, can the government do?

Today Gordon Brown's talking about - the ÂŁ3million he's promising to spend helping 2,000 people buy their first homes - is sure to be welcome to them but not budge the housing market as a whole.

He's promoting international action at important meetings of the G7 and IMF in Washington at the end of this week - which may help avert a future crisis but can do relatively little to solve this one.

No doubt he hopes that the Bank of England will cut interest rates on Thursday - although he must know that these cuts are only being passed on to a few mortgage holders.

He has just seen his chancellor deliver a in which he could do very little - beyond let borrowing rise still further - because there is no money in the coffers to spend.

So, like us all, Gordon Brown finds himself largely a spectator - watching, hoping, perhaps even chewing the odd fingernail - as we all wait to see if this is simply a "market correction" as part of an economic slowdown or the beginning of something much much worse.

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