Tony Blair cancelled meetings for crisis cabinet

He gave no signs that he had cut any deal with the protesters, beyond declaring several times that the budget was the time to decide tax matters - a possible hint of future concessions.

And he indicated he believed oil companies could have done more to get supplies out of their refineries.

His message was clear - the government will not give in to direct action from any quarter.

No escalation

He was vague about whether he had ordered the use of emergency powers to ensure fuel supplies could get to essential services.

But he appeared confident that those powers would not be needed in any case, and that he had done enough to ensure the crisis would not escalate.

If he is right he will have scored a major victory, painted himself as no pushover and enhanced the government's standing.

If he has miscalculated and the protest continues or even escalates, he may be fatally wounded.

It would be a bitter irony for him if his first administration ended with a winter of discontent to echo the one which helped kill off the last Labour government in 1979.

The demonstrations had clearly hit the government like a bolt from the blue. And they presented Mr Blair with the greatest test yet of his leadership.

He clearly did not see the crisis coming and, because of the speed at which it escalated, was forced to react without the considered advice of focus groups and spin doctors.

And he knows that the decisions he takes now will be seen as amongst the most significant of his first premiership.

Poll tax

Parallels are already being drawn with the miners' strike and the poll tax - the first defined the Thatcher government and the second helped destroy it.

And there is no doubt the issue has the potential to seriously damage the New Labour government.

He knows only too well that he has to get this one right. If he escalates the crisis he could end up with serious civil disobedience on the scale of the poll tax riots.

And he does not want the latter days of his first government to be dominated by pictures of police breaking up demonstrations and the violence that could so easily follow.

Equally, he cannot be seen to be giving in to pressure. Having seen what happened in France, and the bad press the Jospin government received for its apparent cave-in, Mr Blair is determined not to go down the same path.

So, whatever the outcome, the decisions he took on Tuesday will stay with him for the rest of his premiership.

And only time will now tell if they were the right ones.