A possible Commons rebellion by Labour MPs next Monday over the scrapping of the 10p starting tax rate has been averted but the episode has further damaged the standing of Gordon Brown.

In 2007, in his last budget as Chancellor, Brown abolished the 10p rate as he reduced the standard income tax rate to 20 from 22p and reformed National Insurance thresholds. Many backbench government MPs felt that hitting some of the poorest sections of the working population in such a way was an affront to their basic Labour principles.

Chancellor Alistair Darling at first rejected demands to compensate those worst hit, like the under-25s who earn less than 18,000 pounds or those who work fewer than 16 hours a week and who therefore do not qualify for tax credits. “I cannot re-wind the budget,” he points out.

But with local elections coming up on May 1, the need to head off rebellion was urgent.

Do you believe abolition of the 10p rate should ever have been considered by a Labour government?

Gordon Brown returns to Westminster today facing a host of negative headlines describing him as a ditherer who has failed to make his mark as prime minister.

The Telegraph reckons Brown’s “failure to define what he stands for is provoking despair even among his loyal supporters” and charts his evolution from a dominant figure in politics under Tony Blair to “Incapability Gordon Brown”.

While Foreign Secretary David Miliband asserts that Brown has “strong values and convictions”, bets are already on for who would be odds-on favourite to take over.

Brown’s cut in the basic tax rate, announced in the 2007 budget, was to be paid for, at least in part, by the abolition of the 10 percent tax rate, but the plan has now turned into a “calculated tax ploy that mutated into a monster”, according to the Independent.

The olive branch offered by Chancellor Alistair Darling to quell the rebellion has prompted outrage, the paper says. It quotes Frank Field, the former minister leading demands for a package of social help for the poorest earners, as saying the measures offered were insufficient. “The talk about bringing forward a package this year or maybe next year just will not do,” Field said.

“If the rebels prevail, Brown could be ousted in days” is The Guardian’s take on Brown’s woes. “For Labour to have scheduled the vote on the 10p tax rate days ahead of the local elections, and with London on a knife edge, seems an act of incompetence so breathtaking that I’m left wondering whether it’s a Baldrick-like cunning plan,” columnist Jackie Ashley writes.

But there is some caution against rushing into finding a new leader. Tribune’s Joan Smith draws parallels to hapless former Prime Minister Anthony Eden: “As the Tories discovered in 1955, some people are not temperamentally suited to the top job and that will almost certainly be posterity’s verdict on Gordon Brown,” she writes. “And while it’s amusing to watch all the people who used to talk up the PM-in-waiting as they scramble to explain their man’s failures, it does leave Labour with a very big problem” — who would be best to replace him?

Like Labour’s in Birmingham a fortnight ago, the overall tone of the Conservative Party Spring conference in Gateshead this weekend has been pretty low-key.

Tory strategists say they are not expecting an election until 2010 — they argue that Gordon Brown might want an 2009 contest but will be constrained by a deficit in the polls and an economy that in all likelihood will still be reeling from the global credit crunch.

So there’s been little in the way of substantive new policies this weekend.

Better to keep their powder dry until an election looks closer on the horizon.

Party leader David Cameron instead put the focus of the conference on casting the Conservatives as the party of the family.

“We’re doing very well with older people, but we need to win over the 30 to 40-somethings,” one shadow Cabinet member told me at the futuristic Sage Gateshead conference centre.

He predicted 2008 would be a year of consolidation for the Tories rather than containing any new dramatic turns.

Both main parties would have to see how the ongoing turmoil in financial markets hits the real economy.

Labour also appears to be shying away from any big ideas for now.

Chancellor Alistair Darling’s budget this week was widely derided as boring, though he would argue that stability is key at a time when the economy is being buffeted by a global storm.

The Conservatives say Darling was boring because he didn’t have any money to play with.

But they’ve not really said what they would do themselves, beyond a vague, long-term commitment to tax cuts.

With the polls volatile, both parties are now scrapping for the same centre-ground with micro-measures targeted at particular groups.

It will take some bold ideas before either can pull away and be certain of victory at the next election.

You can see what Shadow Chancellor George Osborne had to tell my colleague Tim Castle about possible tax cuts under a future Tory government here and the Northern Rock rescue here .

Shadow Chancellor George Osborne talks to Tim Castle at the Conservative Spring Conference in Gateshead about the prospect for tax cuts under a future Tory government.

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