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In the middle of a political storm, it’s not always easy to keep a grasp of perspective – and there’s no doubt that over the last two days, there’s been a veritable political storm. The question is to what extent this is a Westminster Village story and to what extent does it go beyond that?

As yet, the direct damage is limited: one advisor to Gordon Brown has resigned and serious questions hang over the future of a blogger who was once connected (intimately, by his own account) to the heart of New Labour. Both are people that a massive majority of the public will not have heard of before this weekend.

The danger lies on two fronts. Firstly, that the plans were known more widely than has been acknowledged and go to members of parliament or further. Secondly, that the episode becomes symbolic of the government’s approach to politics and truthfulness, especially if it becomes tied in with the expenses row.

On the first point, it’s already clear that more people than just Damian McBride and Derek Draper were aware of the content of the original e-mails. Charlie Whelan, once Gordon Brown’s spin doctor and now working for Unite was copied in, as was a second Unite employee. However, to keep momentum, that’s probably not enough – there’d need to be evidence of more active involvement of people on that level, or of authorisation from more senior individuals.

The second front holds many more dangers. The narrative of abuse of office is well embedded at the moment, thanks to MP’s expenses and the notion that the government cannot be trusted is one that is especially easy to take hold given that it came into office with a reputation for a heavy use of spin. We also know that the expenses story will kick off again once the details come out and that the likelihood is that Labour will come out of it worse (because there are more Labour MP’s and because ministers make juicier targets).

Where does this leave the big betting markets?

An election date in 2010 is surely more likely than ever, although at 1/4 the odds reflect that. If Labour can’t break the news cycle then the European elections will probably be brutal for them. That would make an Autumn election impossible. Whether they can break that cycle will probably depend on whether the budget, due a week on Wednesday, can grab the initiative back – and keep it.

The Conservatives remain about 1/4 to win most seats, which is probably worse value, partly because of the likely need to wait until May 2010 rather than January for a payout. These revelations indicate that elements of Labour close to Brown are still thinking about conducting a very negative, dirty election campaign – even if this particular instance was unendorsed over-enthusiasm. This has been tried several times and has failed several times. Will this weekend’s spectacular backfire cause the Labour leadership to rethink that? I have my doubts.

And what of Next Labour Leader? Brown ought to be under severe pressure because of McBride and Draper’s actions. It’s a member of his inner team that is implicated; at the minimum, he was operating out of control. Unless responsibility goes right to the top – and can be proven to do so – he ought to be safe through to the election short of him choosing to stand down, something that would be out of character. Beyond that, the Brownite faction is likely to be damaged by association: the stars of Denham and Cruddas should be in the ascendant and Balls and the Milibands heading the other way.

Will this weekend be seen as the moment from which Labour couldn’t recover? I think not. Serious though the actions were and damaging though the consequences have been, it’s still remote to most people. It will either fall into the wider ‘sleaze and untrustworthiness’ narrative or be overwhelmed by the economic debate, which is far more personal to most voters.

David Herdson is one of PB’s guest editors