It's being reported that David Cameron is poised to drop House of Lords reform from the coalition's agenda. It won't come as a huge surprise because the size of the rebellion last month when the Bill had second reading seemed too large for the government to overcome with sweet-talking or threats.
The suggestion is that dropping the Lords reform Bill will enrage the Lib Dems. Actually, senior Lib Dems are quite sanguine about David Cameron over the Lords reform problem, and are largely blaming Labour for the impasse.
Even Lib Dems who privately are courting Labour ahead of a possible Lib/Lab coalition after the next election think Ed Miliband was unhelpful by opposing the programme motion, that little parliamentary package which gives the government the power to determine how long MPs would spend debating the Bill.
The government had to drop the programme motion last month after they realised they had no chance of winning it. The plan was for a watered-down motion to be tabled in the second week of September, but many Westminster observers were skeptical about whether the votes for that could have been secured, either.
If Labour were to drop their opposition to the programme motion, say senior Lib Dem sources, Lords reform would have a fighting chance. Without it, the Bill is toast. But there's a lot more going on than just Tory backbench truculence and Labour war gaming.
Firstly Nick Clegg messed up the final Bill, by not making it clear how the supremacy of the House of Commons would be maintained in the event of an elected chamber. The history of this is that when the draft Bill was published, members of a parliamentary committee concluded that there ought to be a referendum, and that the final Bill needed to be a lot clearer about how the Commons would remain supreme.
Clegg's response to this was to merely add a paragraph to the front of the final Bill, saying that the Parliament Acts which have for a century allowed the Commons to over-ride the Lords would be retained.
Why they thought this might be enough to satisfy the Tory dissidents is unclear; their argument has always been that the Parliament Acts were written for an unelected Lords, they wouldn't be credible in a new era because they were written for a bygone one.
Finally the diabolical GDP figures out last week, coupled with extremely grim signals that the eurozone crisis will come to a head in the autumn, may have played a part. The coalition has been wargaming for Greece leaving the Euro for over a year, but there are a huge number of variables and permutations. Privately senior government sources are gearing up for a final, potentially catastrophic showdown in the Eurozone this autumn. They are worried, more worried than ever.
At long last the government may have woken up to the fact that the economic situation is so grim and so liable to deteriorate further that it is simply untenable for Downing Street to be spending so much of its time in the months to come tinkering with the constitution. And you'd struggle to find anyone who'd disagree with that.
Yet David Cameron is reportedly unwilling to back down on his plans to reduce the number of seats in the Commons and try to equalise the size of MPs constituencies. My suspicion is that Cameron has realised that a phoney war that's being going on for months - a threat by some Lib Dems to scupper the boundary changes if the Lords reforms fail - is a red herring.
A few Lib Dems have been under the impression they're holding a gun to the PM's head, but actually most Lib Dems are in favour of the changes. Even so, boundary reforms could still fail, and Cameron could have easily found himself in a position where exerted huge amounts of political capital on Lords reform, only to find the quid pro quo of boundary changes failed for other reasons.
These include problems with the current proposals in England - particularly North Yorkshire, the north-west of England and the West Midlands, where it seems the original plans have met with so many objections that they're going to be revised in the autumn.
Even if these are ironed out Labour will find a way of voting against them and this will attract Tory rebels, not just from those whose seats are being mangled or scrapped but their friends in Parliament.
Most people think the boundary changes still have a fighting chance, but there will still be plenty of rows about them to come. Because of the requirement that no Parliamentary constituency can cross a designated European region, the plans have thrown up some frankly bizarre new seats where constituencies take on the most contorted of shapes, flying in the face of local realities and lumping together communities which have no relationship with one another. The best example of this is on south Merseyside and north Cheshire, where one poor MP would find half their constituency on the other side of the Mersey, with no bridge or tunnel connecting it for miles and miles.
And while it would dent Labour's inbuilt majority in the long-term, at the next general election it would harm Tories in marginal seats who'll face an uphill struggle to get re-elected even under the current boundaries. There are seats in Essex, the south Midlands and most obviously in West Yorkshire, where just the odd ward moved here and there would finish off the political careers of a number of rising Tory stars.
So my hunch is that the boundary reforms could end up on life-support later, but it won't be because the Lib Dems try to exact revenge for the Lords reforms being dropped. The situation is more complicated than that.