Ed Miliband had built up a small lead over the Tories by edging a little to the left of Blair.
He didn't do it very firmly, but it made Labour look like it opposed the Tories.
This was too much for THEM.
They roused themselves from their lairs and came back to kill off any hope.
Yes, Labour's right has reorganised - and launched Operation Self-Destruct.
The formerly dominant Progress wing of the party was very unhappy at Miliband's subtle shuffle leftwards.
So they launched the fightback - not against the Tories but against being against the Tories too much.
The first step was attacking the unions over a "scandal" in Falkirk, the scandal being that unions might wield some influence over selecting candidates for Parliament.
There was no serious skulduggery, but Progress types like Jim Murphy and Douglas Alexander were enraged that unions, which only founded and fund Labour after all, should try to get union-minded MPs selected.
The phoney row over Falkirk was entirely self-destructive - and a reminder that Labour's right is always prepared to damage the party when its own influence is even slightly challenged.
In the 1980s the right was so angry that it broke away completely to form the Social Democratic Party. It was happy to keep Thatcher in power if that was the price of stopping Labour's left.
While the hardcore new Labour types are fine with attacking Labour values, they are useless at attacking the Tories.
The shadow cabinet is in crisis over its failure to make an impact.
But it is no surprise that, for example, Stephen Twigg has failed to hurt Education Secretary Michael Gove.
Twigg basically agrees with Gove's schools policies, so he has nothing to say.
Even the more able new Labourites are in a trap of their own making.
Chris Bryant is bright, has some charm and was personally courageous when he took on the Murdoch machine.
He isn't a self-regarding, pompous fool like Murphy. Or an incompetent like Alexander, who has organised many Labour defeats.
But he tried to do some new Labour "triangulation" and ended up triangulating himself into a very silly shape.
Bryant leaked a speech to the Telegraph so they could make it all anti-immigrant.
Then hoped to deliver it in a less bigot-y way so as to cover both bases.
He tried to have his bigot cake and eat it and ended up with it all over his face.
So, what is to be done?
The simple answer would be to keep moving left and ignore Progress.
Happily Progress has given us a list of which MPs should be kept away from the levers of power.
It advertised its Progress Rally for the forthcoming Labour conference. The ralliers are Alexander, Murphy, Andrew Adonis, Yvette Cooper, Stella Creasy, Gloria De Piero, Michael Dugher, Maria Eagle, Caroline Flint, Tessa Jowell, Ivan Lewis, Twigg and Chuka Umunna.
All of them, with the possible exception of Creasy, are either generally limp or liable at any moment to suddenly announce that one or other horrible coalition policy is actually exactly what Labour ought to be doing.
Unfortunately, while there is general agreement on left and right that Labour's shadow cabinet is sick and weakly, prescriptions for recovery are often as bad as the disease.
Periodically there is a call for "new blood" on the front bench - followed by suggestions to recall the same bloody idiots who messed things up last time.
Incredibly Umunna has recruited Roger Liddle as one of Labour's new business spokespeople.
Liddle threw the last Labour government into a huge lobbying scandal because of his background as a businessman's hired gun.
So just as Cameron is under pressure on lobbying Umunna brings a scandal-hit lobbyist into the political machine.
One shadow minister recently told the Observer that there was a need for "the return of a big beast" like "Alistair Darling."
But, as I have shown in a few columns for the Morning Star, Darling has spent the last few years cramming his pockets with money from dubious bankers.
He took £15,000 for doing his little turn for JP Morgan in May. I warned then that JP Morgan's London office was still up to dubious trading, even after the crash.
Now US authorities are preparing arrest warrants for JP Morgan traders, including the "London whale" Bruno Iksil, for covering up their reckless losses.
So the new Labour ministers think bringing back Darling just after his mates get arrested for financial misbehaviour is the best way to get the party fit and working again.
Meanwhile the man himself is poncing off yet another bunch of bankers.
In July Darling got £8,500 for four hours' work for Bank of America Merrill Lynch.
Merrill Lynch was absolutely central to the financial crisis, pumping out packages of sub-prime mortgages onto world markets.
It lost $50 billion (£32bn) on dodgy trades - and its losses then helped throw the rest of the world's markets into crisis.
Merill Lynch went bust and was bought by Bank of America, which itself was only afloat due to $20bn-worth of US government bailout.
Bank of America paid a $33 million (£21m) fine to US regulators for hiding its intention to pay out billions in bonuses to the Merrill Lynch traders it had taken over.
In 2010 it paid $137m (£88m) in fines to settle charges that they had defrauded hospitals, schools and US town halls over municipal bond sales.
In short, Bank of America Merrill Lynch helped cause the crash, got billions in bailouts, paid billions in secret bonuses and cheated the public sector.
It represents everything that is rotten in the financial sector. But to Darling, it's just a pay cheque.
Labour needs another bankers' friend in the shadow cabinet like it needs a hole in the head.
Unfortunately it makes a habit of trepanning itself.