LAST Friday night, John McGuinness finished on the Late Late what he started in the Sunday Independent, and his praise of Dermot Ahern and Mary Harney showed that, by demoting him, Brian Cowen has created a focus for an alternative to his own leadership and the policy that gives it political coherence -- reform of the public sector as the springboard for a new leap forward in job creation by the private sector. At one stroke, McGuinness has renewed the spirit of Charlie McCreevy and the PDs at their best but now safely wrapped in the flag of Fianna Fail.

It would not be misrepresenting John McGuinness to say that he characterises our current situation thus:

The country is living on borrowed time and borrowed money. The Government is not offering any leadership, and seems to have no realistic plan for dealing with the situation.

This lack of leadership is across every department in government. The Government has become institutionalised and too intertwined with the permanent government that is the higher echelons of the civil service.

The country is, in fact, being run by a small group within the Cabinet, together with a handful of union leaders and a small group of senior civil servants. Democracy is suffering as the Dail, the Fianna Fail parliamentary party and the people in general are not being listened to. The small group of people who are making decisions are out of touch with the real world and need to re-engage with reality. The Government is not giving people any reason to have any confidence in their ability to lead us out of this mess.

In fact, the Government is making people fearful. Central to our recovery is job creation, but Mary Coughlan, who is charged with doing this, is not up to the job. Any kind of dissenting voice is not being tolerated in Fianna Fail as they go into tribal mode and circle the wagons.

Neither will the unions tolerate someone like John McGuinness trying to speak out about public sector reform -- and it was the unions, together with Cowen and Coughlan, who did for John McGuinness in the end.

The Government is not getting the legislation about Nama right. Neither will the recommendations of an Bord Snip Nua be implemented. Fianna Fail has lost its way and has forgotten the people it purported to represent.

Coming from someone on the opposition benches the above would be viewed as a devastating summing-up of the situation the Government finds itself in. The fact that it comes from a member of the main government party makes it even more potent. The fact that it comes from someone who was, until four days ago, a member of the government makes it even more damning.

But what is most damning of all perhaps, is that you won't find too many people who would disagree with John McGuinness's assessment.

It would be easy to dismiss McGuinness's comments as those of an angry, bitter man, a man trying to get some revenge for not being reappointed to his role as junior minister in the Department of Trade and Employment.

But John McGuinness, who is generally a cool-headed and serious kind of guy, didn't seem remotely angry when I met him. He is perhaps disappointed in some ways, but in other ways I suspect John McGuinness knew his fate was sealed that day last year when he made a speech calling for radical public service reforms, and when he followed it up with even stronger and more public comments in this newspaper.

I suspect that John McGuinness made a decision over a year ago to sacrifice short-term career prospects in Fianna Fail in order to tell the truth as he saw it, to speak out and to put the country before his own interests. I suspect he is philosophical about being removed from his job by a troika of Brian Cowen, Mary Coughlan and senior civil servants. I suspect he knew this is what the unions would demand, and I even think he is possibly relieved to be more of a free agent now.

John McGuinness sees his future in Fianna Fail, as long as it will tolerate him telling the truth as he sees it. He does not believe he is alone in Fianna Fail in holding the opinions he does.

Yesterday he told me that after his Late Late Show appearance he was getting more and more support from other Fianna Fail TDs. Though neither was he in any doubt yesterday that the "snipers are being lined up and the knives are being sharpened".

"I have every intention from within the party of continuing my stance to express an alternative opinion," he says. "One that has been expressed to me by many. And I just hope that the party can regain its position in terms of being a social democratic party."

So does he think the party has lost its way?

"I do, yes. It has. We had to go to Inchydoney to regain our socialist roots," he says, half tongue in cheek, "and I think we'll have to go a lot further to regain whatever else it is we have lost. Over the years things were good and we took our eye off the ball and we have forgotten the people we purport to represent."

John McGuinness does not believe his views are maverick, and he does not believe he is alone. But he believes that the leadership of Fianna Fail is no longer even listening to its own people, or even its own parliamentary party.

When I put it to him that many people feel that there is a cabal at the highest level running things, and that they are insulated from the grim reality that most of us live with these days, he actually agrees.

"That's true,'' he says. "As political leaders, we need to re-engage with the world that is out there."

When I push him on who is in this cabal he mentions the Cabinet and the social partners. All of the Cabinet or some of the Cabinet?

"Some of the Cabinet."

So the country is being run by some of the Cabinet, the leaders of the civil service unions and the higher echelons of the civil service?

"The main decisions around how the country is managed are managed through this process."

So the Dail is a waste of time? "The Dail has always been sidelined from the partnership process," he says. "We very rarely get a chance to discuss the proposals before they are put, before they are set in stone.''

So, to a degree, how sidelined is democracy?

"My belief is that if you are an elected public representative you should have an opportunity to debate and to frame what is going to happen in the country and to a large degree that doesn't happen."

He goes on to say that "it would seem to me that the Dail is sidelined in this whole partnership process and at times it would appear to me that they [the social partners] make the decisions for the whole country and there isn't a proper balance".

As if it were not bad enough that the country is apparently being run in an anti-democratic fashion by a small group of largely unelected people, McGuinness argues that the handful of elected representatives who are actually privy to the decision making are out of touch with reality and offer no real leadership.

"They are just not getting it," he says of those on top. "I think within each and every department there is a lack of political leadership and a lack of the stamp of political policy. . . and we need to correct that. We need to first acknowledge it and then take the steps to ensure that the leadership is improved."

McGuinness believes that government can become institutionalised if it spends too long becoming entangled with the civil service.

"Maybe we are experiencing this happening," he says, "And the dynamic that should be there between politics and the permanent government is not representing the people as it should, and it's not responding as it should. I would hear all of this articulated at our Fianna Fail parliamentary party meetings and as a political class and political leaders we need to respond immediately and more openly to the demands of the public and to the demands of the parliamentary party as they express the views of their constituents."

So, as a member of Fianna Fail, does he have confidence in the Cabinet and the Government to get us out of this mess?

"I would like to see them," he says, "without getting into the personalities, taking a more direct interest in the plight of the individual in the State: the elderly person, the sick person. . ."

And again he stresses that in order to do this, "they have to listen to what is being said at cumann meetings up and down the country, and particularly what is being said by the parliamentary party. Because what I am saying is not new to the Cabinet".

But it seems that in the retreat into what McGuinness terms 'tribalism', the small cabal running Fianna Fail and the country does not want to hear the message that McGuinness is trying to convey from the grassroots of the party.

When I put it to him that his sacking has been taken as a message that Brian Cowen will not tolerate any dissent, he concedes: "I have seen that message out there and I suppose that what I have been saying and doing in trying to influence the direction of policy, and so on, has brought me into conflict with Mary Coughlan or with Brian Cowen in terms of how I said it and why I said it. I suppose my non-appointment as a junior minister will be seen as (an indication) that this kind of discontent or that kind of outspokenness will not be tolerated by the party."

Is there a sense, too, that he was a sacrificial lamb for the unions?

"Yeah, well I didn't enjoy a great relationship with the public sector unions after my speech in September. That could be read into it too."

And does he also think that the reported difficulties he had with Mary Coughlan were among the reasons he wasn't reappointed?

"I do, frankly," he says. "Where you are demanding change against the view of some of your own political masters and against the view of the civil servants within the department, it creates a tension that is either healthy or unhealthy. And in terms of my position, it was, at the end of the day, an unhealthy position to find myself in politically, and therefore I now find myself out of the position."

And does he feel that Mary Coughlan is the best person for the job of selling Ireland as a place to create jobs?

"Quite frankly," he says, "I had my differences with that department in terms of policy and direction. I think we need to see a more dynamic approach to the creation of enterprise within the country."

And did he find that Mary Coughlan wasn't dynamic enough?

"The whole department, including the political leadership, isn't dynamic enough," he says.

The significant thing about all this is that John McGuinness is not some dissident voice in the wilderness. In fact, John McGuinness right now, as evidenced by the reaction to his removal from his junior ministry, is probably the most popular Fianna Fail politician in the country.

His views are probably the most populist and in tune with public opinion, and he is seen by many now as being one of the few people in Fianna Fail who seem to be engaged with reality and who seem to be telling the truth. His honest and brave performance over the past few days has been characterised as the best performance given by anyone in government in months. And he is the guy they got rid of.

It would be no exaggeration to say that in a party that seems to have no plan, no effective leader, either existing or potential, a party that looks paralysed and numb, John McGuinness could be Fianna Fail's only hope right now. Because it's looking fairly grim for the upcoming local and European elections. McGuinness accepts the elections won't be pretty, and thinks that maybe a disastrous performance in the elections is what Fianna Fail needs to snap it out of its torpor.

But he believes there is a far bigger reminder of how bad things are: "There is nobody in business that could get a greater reminder of where they stand than a boss that looks at his income dropping from 60 billion to 32 billion with one single section of his company taking 21.5 billion to run. . . We can't continue where we're going. We're living on borrowed money and borrowed time and the notion that the dogs are barking, the caravan will move on isn't right anymore. And the notions of tribal survival for political parties needs to be pushed to one side."

John McGuinness still maintains that public sector reform is central to getting us out of the current crisis.

While he stresses again, as he always has, that he is not talking about cutting frontline staff like nurses and gardai, he still believes that huge money could be saved by looking at the upper echelons of the public sector and by looking at systems that are holding back talented and dynamic people.

To that end, he says, he hopes the report of an Bord Snip Nua "will be made public without having been doctored by anyone".

Does he have faith in the Government to then take the actions required, even if it means upsetting the public sector?

"I have my doubts," he says.

McGuinness's message on the public sector is more important than ever.

So is what he tells us, through his words and through his sacking, about the state of this Government.

The level of public support for him is hugely significant too. While John McGuinness might have been viewed as somewhat of a maverick a year ago, when in fact he was just speaking common sense, now he is seen as one of the few men who was in the Government reflecting public opinion, while the rest of them have gone tribal and circled the wagons.

The whispers of support John McGuinness gets in the corridors of Leinster House are becoming braver. He could also lead to more members of the parliamentary party speaking out, as they see that there is life after dissent. McGuinness's views are perhaps not those of a disaffected, marginalised rump in Fianna Fail, but the views of the grassroots of Fianna Fail and of most of the public. The out-of-touch rump could in fact be the small cabal that is running the country into the ground.