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Does the Tory leader have what it takes to win the key to Number 10 from Labour?

JAMES Grundy couldn't believe what he was seeing. The Conservative council candidate in the solid Labour town of Wigan, Lancashire, had become used to watching the votes in the red pile mount on election night up in this part of the north-west of England. But, standing in front of the ballot boxes in the early hours of Friday, something incredible was happening.

"I knew we'd had a good response on the doorstep," he reflected. "I mean, I'd had miners who had been laid off by Margaret Thatcher who were saying they were so fed up with Labour that they were going to vote for me. But I went into the count not really knowing what was going to happen. Then when the boxes opened, it was just an utter landslide."

In an election last year in his ward – Lowton East – Labour had easily seen off the Tories, by 1,085 votes to 782. When the final tally was counted on Friday morning, Labour's support had fallen to 758. Grundy, meanwhile, had more than doubled the Tory vote, up to 1,972. "People just wanted to give Labour a kicking," he said. "And for the first time, they came over to us."

Over in nearby Bury, elated activists who had won the council from Labour were now talking of the future, about Tory MPs in areas that were almost stereotypically Labour. "Suddenly people are talking about us winning there in the general election," said one. "Things have changed. It's as simple as that."

The talk this weekend is of the Tipping Point – the notion coined by New York thinker Malcolm Gladwell that once a series of small events reaches a certain point, there is no going back. Gordon Brown is spending the weekend holed up at Chequers, trying to work out how he can prove this theory wrong. Labour's crushing defeat went below even their own lowly expectations. Instead, their worst nightmare has come true: David Cameron's Conservatives appear to have broken out of their core areas in the south.

For the Tories, the realisation is dawning: after 11 years in the wilderness, power may now be as near as 11 months away. As the depressed and bedraggled remains of the Labour party stagger off the battlefield this weekend, the startling likelihood of Prime Minister David Cameron hoves into view. Aged just 41, and a parliamentarian for only seven years, he is now facing up to the likelihood that within two years at the most he could be entering Number Ten.

Many questions are being asked about the wreckage that surrounds the Labour party. But perhaps a more pertinent question is that facing Cameron in this hour of his greatest triumph. Is he ready for it?

The Tory leader knew a historic victory was his by 2am on Friday morning. The previous week he had set himself the target of winning more than 40% of the votes – a target which many Tories felt could come back to haunt him. But by 2am it was clear already he would easily beat the figure.

After just two hours' sleep, Cameron was whisked off on a helicopter tour to inspect his new territory – out west to the Vale of Glamorgan where he spoke to shoppers, and then up north to the day's big prize: Bury. He stood in front of a statue of Sir Robert Peel, describing him as "the man who really founded the modern Conservative party". A banner proclaimed "Winning in the North". To every passing camera, the message was the same: we're not complacent, but this is a turning point.

We have been here before, of course. Thirteen years ago, on another May morning, another fresh-faced opposition leader was banging almost the exact same drum as Cameron. In the council elections of 1995, John Major suffered a hammer-blow to his credibility, losing half of the 4,000 seats the Tories were defending. And the following day the new leader of the Labour party, Tony Blair, was on walkabout. Back then, it wasn't Bury which symbolised a shift on the political axis, it was Brighton, and Blair was unable to talk about 'Labour Hove' with a straight face.

"It is the night when the Labour party has shown that we have got support from all parts of the nation," Blair declared. "We do not take anything for granted," he added. Little wonder that many pundits have been moved to draw comparisons between the '95 Blair and the '08 Cameron.

Cameron himself is among them. The Tory leader, say allies, has been intently studying Blair's opposition years as he too prepares for power in such remarkably similar circumstances. Cameron's inner circle have never hidden their admiration for Blair's political skills, borrowing not so subtly from the techniques he mastered. But the Tory leader believes now that his predecessor made one big mistake in opposition back then: that of failing to prepare properly for government.

"Blair never knew how hard government was going to be, and David is under no illusions about that," says one ally. Blair subsequently admitted that his biggest regret was that he failed – as he saw it – to properly deliver in his first term in office, the very time when he was at his most popular. Cameron is determined to learn from his error and has been thinking through what issues he would focus on from Day One as PM.

First up is the groundbreaking work on Britain's "broken society", commissioned by former leader Iain Duncan Smith. Famously, Blair back in 1997 charged Liverpool MP Frank Field to "think the unthinkable" on welfare reform, challenging him to bring an end to the development of Britain's 'underclass'. It got nowhere and Field soon quit. Cameron is determined to breathe new life into the project, believing it could be a defining issue in the next election. Linked to this, Cameron also wants to place renewed attention on public spending. Target-driven projects led from Whitehall are likely to be phased out; instead Cameron is considering taking a major political gamble by loosening controls so that voluntary groups and local organisations can deliver more services. The Tories plan to allow charities and parents to set up schools with public funds and are warning that all welfare claimants who are capable of working should find a job.

On these issues Cameron is said to feel on firm ground. But his troubles begin in other areas – notably question marks about his background. Part of his problem in connecting with the wider public could lie in his privileged background. Brought up as the son of a stockbroker, he was privately educated at Eton before heading to Oxford. With old school friends such as Boris Johnson around him, he has been accused of having more Etonians in his close circle than any Tory leader since Harold MacMillan. Cameron's wife Samantha is the daughter of a baronet and together the couple have been estimated to be worth £30m.

On the plus side, however, Cameron has won significant public sympathy over the couple's care of their first son Ivan, who suffers from severe epilepsy and cerebral palsy. Cameron has spoken of the shock he and Samantha experienced at the time. "The news hits you like a freight train… You are depressed for a while because you are grieving for the difference between your hopes and the reality. But then you get over that, because he's wonderful."

Politically his challenges include the very future of Britain. The Tory leader is a die-hard Unionist, say friends, pointing to the speech he made in Edinburgh last year when he declared uncategorically that he would fight to preserve the United Kingdom. Quite how he achieves it is less clear. A Cameron government is committed to banning Scottish MPs from voting on English laws, but Tory MPs are divided as to how that will work. Those who favour a softly-softly approach were this weekend being warned by

London Tory MP Mark Field: "It won't be enough to stop the tide of unease among English voters who want the same parliamentary representation as Scots."

There are more general problems too. Even those sympathetic to Cameron say the Tory leader has so far failed to properly lay out exactly what his cuddly new Conservative party is about. Cameron's inner circle is said to be aware of the problem. "They don't disagree when you point out that people are more anti-Labour than pro-Tory," says one insider. The row over the 10p tax rate last month is an example of the lack of direction, say critics. Cameron sought to capitalise on Brown's decision to remove it, but he will not reinstate it and has not proposed a compensation package.

Right-wingers, meanwhile, are already grumbling about the commitment by Cameron and shadow chancellor George Osborne to stick to Labour's spending plans for their first two years in office. Cameron's team believe the move is necessary in order to head off Labour attacks about "Tory cuts". But the move is opposed by many on the right who are still to be convinced by the man at the helm.

Despite being groggy from defeat, Labour's counter-attack is already in place. Last week, Brown labelled Cameron a "shallow salesman". One Labour minister reflected: "We're going with what people think about Cameron – that he's an upper-class snake oil salesman." Labour ministers predict the dour yet solid image of Brown can yet be restored.

Is this whistling in the wind? Election analysts offer a qualified answer. "You can now say that it makes it possible for the Tories to win the next election," said Professor John Curtice of Strathclyde University after Thursday night's vote. Others are more cautious. Back up in Wigan, Grundy has some advice. "People are ready to listen to us again in areas like this but we are still on probation."

In the months ahead, the biggest trick of all for Cameron may be about managing expectations – particularly if, as is expected, Brown now hangs on until 2010 before calling an election. A party which expects to claim power once again could get impatient, even complacent. Cameron will not allow it, say friends. "He is personally and psychologically ready."

Stark message to Brown

THE clock is ticking. Labour backbenchers say Gordon Brown has as little as six months to get his act together. Even some loyal ministers will only give him a yea at the most to revive Labour's disastrous poll ratings and regain the trust of the party and the public.

Left-wing Labour MP John McDonnell, who last year failed to secure enough support to challenge Brown for the leadership, warned this weekend: "Brown's in denial. If we don't get a grip we will sleep walk into a Tory Government."

Since last week's election humiliation, Brown has shown a contrite and listening attitude – but McDonnell says words are not enough. MPs on the left are emboldened by their success in forcing Brown into last month's U-turn on the 10p tax band. Now they say the PM has to address the needs of striking public sector workers and OAPs calling for an increase in the basic state pension.

Brown has his own plans – a relaunch of his premiership, with new measures on welfare reform, crime, failing schools and binge drinking. A reshuffle to freshen up the cabinet is expected before the summer.

In spite of the sense of crisis, very few Labour MPs expect or want a leadership contest. New party rules make it a lengthy process requiring the support of 20% (or 71) MPs. Few believe potential candidates such as Alan Johnson, David Miliband, James Purnell or Ed Balls will do any better than Brown.

Jim Devine, the Livingston MP, had a message for the PM yesterday. "My advice would be 'relax and don't listen to your advisers'. He just needs to be himself; he's a compassionate and caring individual who knows exactly what needs to be done on issues like the economy and how to eradicate poverty."

But Katy Clark, a member of the Campaign group of left-wing MPs, said Brown needed to reconnect with voters by returning to a traditional Labour agenda. The Ayrshire North and Arran MP said: "We really need to tackle some of the bread and butter issues like poverty, housing and rising fuel bills."

Brown's biggest Parliamentary hurdle is the vote on the Counter Terrorism Bill, which will extend the period of detention for terror suspects from 28 to 42 days. The PM has said himself that the 10p U-turn was "not a green light for rebellion" and his aides say he would rather be defeated than back down.

One whip, asked whether the Government would win the vote, said: "We've a way to go yet."

A leaked document drawn up by Government whips showed that more than 55 Labour MPs were prepared to rebel, with another 44 undecided. As in the case of the 10p tax change, the opposition parties are prepared to vote with the rebels to defeat the Government.

In the run-up to summer, Brown also faces trouble over the embryology bill, the 10p tax compensation package, strikes by public sector workers and general economic uncertainty.