Ed Miliband has been through a bruising week. His close colleagues believe there is a reason for the intensity of the assaults – the right is worried Labour will win

Ed Miliband has still not convinced enough voters that he is a prime minister in waiting, but he is not short of top quality advice on how to perform like one.

Last weekend, after another torrid period for the Labour leader at the hands of Tories and dissenting Blairites, Miliband escaped the Westminster hothouse. He headed for a rural hideaway in Kent with David Axelrod, the American strategist who advised Barack Obama on his way to the White House, and Alastair Campbell, who helped put Tony Blair in No 10. “He was being coached for the television debates,” said a source close to Miliband.

Campbell played the role of David Cameron while Axelrod scrutinised his performance and offered some tips on how to clarify the core Labour message. Campaign chief Douglas Alexander and others in the Miliband inner circle, including Stewart Wood and Spencer Livermore, were there too, war-gaming election tactics.

With two and a half months to go until the general election and with the rightwing press heavily on Miliband’s case, things didn’t remain quiet for long. As Labour tried to fine-tune its messages, rather late in the day, and prep its much-pilloried leader, the Tories were in full-on campaign mode exploding bombs at Labour’s door at every opportunity.

On Saturday evening a week ago, news reached the retreat of a Sunday Telegraph story in which the boss of Boots the chemist, Stefano Pessina, said that a Labour government under Miliband would be a “catastrophe” for Britain. Team Miliband knew the Tories were opening a new front with their allies in the business world. With Miliband already under intense pressure and morale in his own party brittle, it was a critical moment.

There were two ways to respond. They could try to argue calmly but confidently that Pessina was simply ill-informed and wrong, and hope to ride it out. Or the Labour leader could turn defence into attack and unleash a counteroffensive of equal ferocity.

“The risk of the first approach was that we would look uncertain, and the danger of the second was that the Tories would just pile in even more on the anti-business stuff,” said a shadow cabinet source. By Sunday morning, the inner circle had decided there was nothing for it but to fire back with both barrels. Wood talked to Miliband and then Miliband called the shadow business secretary, Chuka Umunna.

They decided on multiple interventions, believing that if they took aim directly at Pessina they could sharpen the party’s key messages on the need to change the economy. Miliband would walk into the gunfire. Labour’s attack unit quickly turned up information on Pessina and Miliband let rip, accusing the Boots chief of avoiding tax by living in Monaco.

“You have now got this unholy alliance between the Conservative party and people like him who are actually saying that a country can’t change … Part of my job is to stand up to these powerful forces who aren’t paying taxes, who are avoiding their taxes.”Wood told the Observer that the three-day counteroffensive was brave, and that it worked: “Issues around responsible capitalism – how to build a more productive and a fairer economy where the rules serve everyone and apply to everyone – are at the heart of what Ed’s leadership is about. I think the public is strongly with us on that. When we return to it, it exposes opponents of this agenda as out of touch and lacking ambition to reform our economy in the public interest.”

At Tuesday’s meeting of the shadow cabinet – and after the Daily Mail had wheeled out former Marks & Spencer boss Stuart Rose (a Tory peer) to say Red Ed was a “1970s throwback” – the mood was, according to several who attended, more steely than normal.

One shadow cabinet minister likened it to the first world war. “We are dug in there and we know they will blast us with attack after attack. They have 85% of the press behind them and three times the money. We just have to fire back what we can when we can and stay alive. I think we survived.”

In an interview with the Financial Times on Saturday, Miliband claimed the Tories and the rightwing press were painting him as feeble and his party as split, incompetent and anti-business only because they were frightened. “If we were miles behind in the opinion polls they wouldn’t be doing it. It’s because they fear I’m going to win.”

But at prime minister’s questions on Wednesday, as Miliband accused Cameron of doing nothing to stop hedge fund bosses who are funding the Tories’ election effort to the tune of £47m from exploiting tax loopholes, he was undermined by another Labour blunder, which helped a confident Cameron ride through the session with ease. On Newsnight the night before, shadow chancellor Ed Balls had been asked to name a single businessman who supported the party but forgot the surname of the one entrepreneur he could bring to mind. Later he put out a grovelling apology on Twitter. “I know, I know. Bill Thomas, our small business taskforce chair, will never forgive me. It’s an age thing!” Just when Miliband needed assured performances and backing, Balls was blushing with embarrassment beside him on the front bench.

Facebook Twitter Pinterest Labour campaign strategist David Axelrod. Photograph: Cliff Owen/AP

Blunders like that happen to all parties. But the problem for Miliband’s Labour is that they occur too often. Whether it is pictures of the leader chomping on a bacon sandwich or, more damagingly, the aspiring prime minister forgetting to mention the deficit in his 2014 conference speech, the Tories are fed too regularly with juicy ammunition that allows them to sustain a narrative of almost comic incompetence about their challengers, one that mostly focuses on the leader himself.

Few in the Labour party have lost hope of winning on 7 May, or at least of securing more seats than the Tories. And why should they? After one of the most intense assaults from the Tories in years, Sunday’s Opinium poll for the Observer puts Labour on 34%, two points ahead of the Tories. The party might be losing support to the SNP in Scotland, to the Greens from the left and to Ukip from the right, but it is still very much in the game.

It is just that Labour too often plays like a team desperately lacking unity and self-confidence, and one that somehow can’t quite believe it deserves to prevail. “If we do it, we will stumble across the line. We don’t really play like winners,” says a senior MP. The mood in Labour is one of despair at its failings and vulnerabilities in the face of Tory assaults, accompanied by a resilience and intense desire to win.

Even Miliband’s critics inside the party say they are desperate for him to reach Downing Street and insist that off-message contributions are often wrongly seen as disloyal when they are meant positively. John Woodcock, who was fingered by some for plotting to oust Miliband last November, said: “Just because people have a different view doesn’t mean we aren’t desperate for Ed to win. The most important thing is to dispel the idea that people like me have given up. This government is there for the taking. We are determined to win and make Ed our prime minister.”

His comments speak volumes. MPs like Woodcock believe Labour has failed to articulate a clear enough vision. Others add that absence of vision is accompanied by too much central control that throttles MPs, candidates and activists on the doorsteps. The result is they have little to say and can’t ad lib. Marcus Roberts, deputy general secretary of the Fabian Society, says: “Labour must let go of its machine-politics grip on candidates and trust local campaigns to interpret the inequality message and use big policy ideas in different ways in different seats.”

Party tensions over policy and strategy exist at all levels between those who think Labour can “win 1-0” with a minimalist, safety-first programme and others who want to go big and bold. While Labour seems unsure of itself, the Tories are settled on their messages. They have their “long-term economic plan” and a new line that the choice is between their “competence” and Labour’s “chaos”. Simplicity is all. Labour, meanwhile, is still agonising over campaign slogans and its manifesto. While the Tories are four-square behind Lynton Crosby, their campaign chief, many Labour MPs lack the same faith in their own team, led by Alexander.

Facebook Twitter Pinterest Ed Balls had to apologise for an embarrassing gaffe relating to Labour business donors. Photograph: Stefan Wermuth/Reuters

Arguments have been raging in recent weeks over what form the manifesto should take and who should write it, as well as what should be in it. Key policies are still being debated. Will the party offer a cut in university tuition fees from £9,000 a year to £6,000, as it led everyone to believe it would in 2011? Balls is reluctant. A few weeks ago there was talk of not having a manifesto in the traditional sense, but of producing a focused economic plan. That enraged those who want the party to spell out a big vision involving devolution and the passing of more power and money over the running of local public services.

The unions are breathing down the party’s neck, withholding funds until they see that the colour of the manifesto is red enough. Running the show are characters who don’t get on. Alexander and Balls – old enemies since the days of Gordon Brown’s “election that never was” in 2007 – lock horns regularly. Alexander and Labour’s new leader in Scotland, Jim Murphy, who is trying desperately to find ways to limit huge potential Labour losses to the SNP, are far from close. A senior frontbencher said Labour HQ was like a “vipers’ nest”. That is why TV companies have not been allowed access for “fly on the wall” films of Miliband and his team in the days immediately before the election or on election night, for fear of what they might see.

Critics of Miliband say the failure to articulate clearer messages has allowed the Conservatives to operate a traditional campaign against Labour (accusing it of being high tax, high spend, anti-business). “Labour never had the proper and deep conversation about why it lost so badly in 2010. Ever since, it’s been hoping to fall over the line first,” says Neal Lawson, chair of the centre-left thinktank Compass. “The lack of strategy, vision and a broader movement are now being revealed. Labour never landed the fact that it was the banks that caused the crisis because it was Labour that gave them the freedom they abused. The Tories now exploit that weakness by saying any control is anti-business. It’s as if 2008 never happened.”

And yet – despite it all – Labour is not dead. It did not govern during the Blair and Brown years without learning how to operate with dysfunctional internal relationships and power struggles. On Saturday a puff of supportive smoke came out of Tony Blair’s office as the former PM said he would offer whatever support Miliband wanted during the campaign.

The Tories and Tory press are more worried than their relentless anti-Miliband tirades suggest. On Saturday the Tory-supporting Times asked why Cameron’s party was not ahead in the polls given Labour’s troubles. Loyalty behind Cameron is by no means assured if the polls stay as they are. This week – as the Conservatives entertain some of the richest business people at a black-tie fundraising dinner – Labour will keep up its counterattack against a party that Miliband described on Saturday as the “political wing of offshore hedge funds”.

When asked how it was all going, a Labour peer close to Miliband screwed up his face. “Aaaagh,” he said with a grimace, “I think it is going to be us. It is not pretty, but I think we will do it.”

There is no point in hiding the difficulties Labour faces, but to the astonishment of many of its own troops, there remains real hope that it might still win the war.