The whole country seems to have gone berserk." So wrote Labour Cabinet Minister, Barbara Castle in her diaries in May 1968, the last time that Labour suffered a defeat on the scale of this year's local elections. Back in 1968, another Brown (George, not Gordon) had already resigned, and leadership plots quickly started against the Prime Minister, Harold Wilson.

Forty years on, having finished in third place in the local elections, our present Prime Minister must feel like reaching for the hemlock. For Labour to have performed worse than when these councils were last fought over in 2004, when the Iraq war was still at the forefront of people's minds, is nothing short of calamitous.

Boris Johnson's victory over Ken Livingstone in the London mayoral race means that the Conservatives have landed the biggest prize in local government, something that will send shivers down the spines of Labour MPs in marginal seats in the capital and in the South-East more generally.

Clearly, the Conservatives now have momentum on their side, having achieved their best performance in local elections since 1992. If these results were repeated at a General Election, then David Cameron would have a whopping overall majority of about 125.

What then, do these truly dreadful results mean for the future direction of the Government? After nearly 14 years, New Labour now looks distinctly old and tired, as indeed does Gordon Brown. At the moment, Brown is not able to see around corners, and he's constantly getting knocked down in the middle of the road.

When he first took over from Tony Blair, Brown failed to distance himself sufficiently from the policies of his predecessor. He made a hash of the troop withdrawals with his tacky visit to Iraq during the
Tory party conference. That issue should now be revisited. Brown could take advantage of the fag-end of the Bush presidency to signal a fresh
start by setting a date for withdrawal of all Britain's troops from Iraq.

The Prime Minister also needs to come clean by admitting that his plans to lock up terrorist suspects without charge for up to 42 days are a dead letter. The Conservatives will portray any climbdown as yet more evidence that Brown is a ditherer, but another U-turn might be a better long-term course of action than going down to a humiliating Commons defeat.

More fundamentally, Labour has to start re-connecting with the people that it is supposed to represent. Nothing did Brown more damage at
these elections than the impression that a Labour Government was going to hurt the poor through the abolition of the 10p tax rate: onThursday, Labour's vote fell most heavily in its traditional heartlands, especially in Wales. How on earth did Labour end up in a situation where the Conservatives were able to occupy the moral high ground on poverty, when their only firm tax policy so far is inheritance tax cuts for the better-off?

A large part of the blame rests with Gordon Brown for trying to ape the Conservatives at every turn. The Prime Minister appears to be impaled on the Blairite fence, scared stiff that the floating voters will desert him in the South. But they already have. As Tony Travers, the London elections expert, pointed out at the weekend, "Tony Blair's Conservatives have gone home." After years of being unelectable, the Tories at last have a leader who appears to speak up for the concerns of the suburban middle classes.

These Blairite switchers are not coming back, and that is why Brown must free himself from the empty vessel that is Blairism. Instead, he needs to come up with policies that appeal to disillusioned Labour voters.

Contrary to what one might think, a "core vote" strategy, as it is derided, does not mean electoral suicide for Labour – for every thousand or so floating voters in marginal constituencies, there are many more thousands of traditional Labour voters currently deserting the party in their droves.

Labour are probably stuck with Gordon Brown until the next General Election. Short of the Prime Minister resigning, there won't be a leadership contest. There is no history of the Labour Party ditching their leaders, in contrast to the recent history of the other two main parties. Besides, the date in the Labour Party rule book has already passed for any challenge this year.

Brown is nothing if not relentless. In the coming weeks, he will tell us ad nauseam that he is the right man to take the long-term decisions to lead us through unprecedented economic turbulence.

But what the Prime Minister lacks is the flexibility to change course. When David Cameron gets something wrong he just bins it, and moves on. Brown, on the other hand, is stuck in the "tough on terrorism,
strong economy" mantra that helped Labour to win the last General Election.

This week, the Prime Minister hopes to kick-start a political fightback, but there is no point in him trotting out the same old slogans. He badly needs a fresh narrative, a compelling story that will define his premiership before it is too late.

The problem is, I'm not sure that people are listening any more.

Change is in the air.

Mark Stuart, from York, is a political analyst who has written the biographies of John Smith and Douglas Hurd.