Karie Murphy was quietly moved on as the opposition frets over whether it is ready for government

Jeremy Corbyn’s advisers joke that their private strapline for the looming general election is: “Downing Street or the dole.” Everyone at the top of the Labour party is gearing up for a gruelling campaign – but they’re also starting to imagine life afterwards.

When one of Corbyn’s key lieutenants, Karie Murphy, was quietly shifted aside last week, the official line was that she was keeping her title of chief of staff, and would move to Labour’s HQ in Victoria to oversee the party’s election campaign.

But her departure was the most public signal yet of deep disquiet at the very top of the party about whether Labour is ready for government – or if Corbyn loses another general election, what might come next.

Corbyn’s close allies John McDonnell and Diane Abbott have been pressuring him to move Murphy for months, citing unhappiness among the 30-plus staff in his office, and the concern she was one of those acting as a brake on Labour’s shift towards supporting a second referendum.

Charismatic and tough, Murphy often held the combative conversations Corbyn tends to avoid, but McDonnell and others came to believe she was taking too many decisions on her boss’s behalf. As one ally said: “Karie had lapsed into thinking she ran Jeremy. Thankfully that era is over.”

Facebook Twitter Pinterest Karie Murphy. Photograph: David Cheskin/PA Archive/Press Association Ima

The catalyst for sidelining her was the botched attempt to abolish Tom Watson’s post of deputy leader, on the eve of the Labour conference.

The move was blamed at the time on the Momentum chair, Jon Lansman, who tabled the motion at the national executive committee (NEC). But friends say Lansman willingly became the fall guy, to shield Corbyn from direct responsibility.

The Guardian understands that while Corbyn had been infuriated by Watson’s speech calling for Labour to become an out-and-out remain party, and his allies had discussed ways of isolating Watson, the Labour leader had specifically asked for no action to be taken before conference.

Murphy, his tough-minded enforcer, pressed ahead, reportedly telling colleagues it was too late to back out. Afterwards, according to two people present, the mild-mannered Corbyn fumed that the chaos made Labour look like “fucking student politicians”. He was forced to step in publicly and defend Watson.

And as he and Watson sat alongside each other on the front bench in Westminster later that week, the deputy leader also showed Corbyn a screenshot of flyers handed out in Brighton calling on delegates to disrupt his speech – which he believed had the imprimatur of the leader’s office.

Ironically, the putsch had the reverse effect to that intended by the plotters, and gave Watson a new lease of life.

He had seemed to colleagues to be increasingly detached in recent weeks, causing some to speculate that he could follow his friend Luciana Berger to the Lib Dems, perhaps taking 20 or so colleagues with him. Instead, he arrived in Brighton emboldened and invigorated.

The other factor in Murphy’s departure was the resignation of Andrew Fisher, who lashed out against the leader of the opposition’s office (Loto) in a furious parting email.

Extracts were leaked to the Sunday Times. But after news of the shakeup in Loto emerged on Tuesday, the hyper-partisan website Skwawkbox – widely regarded in Labour circles as Murphy’s mouthpiece – published the entire note. The picture it painted was less of ruthless ideological shock troops, more of chaos, division and simmering discontent.

The revered elections expert David Butler said last week that he had “never felt more confused and uncertain” about the outcome of the coming election.

Corbyn loyalists hope that as in 2017, Labour will be able to reframe the campaign, away from Johnson’s “Get Brexit Done” message, and return to the domestic agenda that worked so well for it in 2017 – though that may be much less effective when the Tories are talking incessantly about funding schools, hospitals and police officers.

If Johnson returns with the solid majority he craves, however, McDonnell has conceded that he and Corbyn would have to step aside.

And with Brexit cutting across the party’s traditional left-right divide, it is very unclear whether they would be followed by a candidate who shares their political perspective. “It will be chaos,” says one leftwing MP.

Corbyn’s victory over Brexit policy on the conference floor in Brighton underlined the intense loyalty he still commands from Labour members. “This is Jeremy’s party!” said one jubilant shadow minister at the time.

But his longtime allies are also well aware that none of their favoured successors – Rebecca Long-Bailey, Laura Pidcock – are likely to inspire the same devotion.

Internal polling earlier this year suggested Keir Starmer and Emily Thornberry were the most favoured successors among members, with Watson some distance behind, according to insiders.

McDonnell: I can't see Corbyn staying on if Labour loses election Read more

Earlier in the year, Starmer was rumoured to have struck up what colleagues jokingly called a “bromance” with McDonnell. It would have seen McDonnell dominate economic policy, while Starmer led the party, a 21st-century version of Tony Blair and Gordon Brown’s Granita pact. But the pair deny they were ever considering a deal, and McDonnell made clear in Brighton that he believed the next leader must be a woman.

First, though, the party will have to hold together through a potentially rocky general election, with a carefully constructed compromise policy on Brexit. Corbyn’s allies have allowed themselves to be dragged a long way over the past 12 months by a membership for whom, as one puts it, “remain is a feeling”.

But Starmer and other remainer MPs fear it may not be far enough. One thing appears certain, as all the major parties fire up the battle buses for this most unpredictable of elections: as one leftwing MP puts it, “it’s shit or bust for project Corbyn”.