Harold Wilson's old friend and adviser Lady Falkender once observed that while left-of-centre journalists always seemed to be leaning over backwards to be fair to the Conservative party, right-wing journalists also seemed always to be leaning over backwards to be fair to the Conservative party. Her observation has some resonance this weekend. Suddenly everyone in the media is leaning over backwards to be fair to the Conservatives.

Let me put my hand up right away – if the bodily metaphor permits a further contortion. I leant over backwards long ago by suggesting on the weekend of Iain Duncan Smith's election to the leadership that his task was nowhere near as daunting as the one faced by Neil Kinnock in the 1980s. Nearly a fortnight ago I was leaning over again, detecting fresh signs of life in the corpse of the Conservative party. Even so, the accolades whirling around the leadership of Mr Duncan Smith and his Shadow Cabinet are getting silly, almost as silly as the premature obituaries of the Conservative party. Like an overcrowded yoga class, there is too much leaning going on.

No group is more surprised than the Conservative leadership, which cannot quite believe the change in the way the party is regarded. Virtually every statement from a member of the Shadow Cabinet is being greeted as a revolutionary leap forward. When Oliver Letwin, the shadow Home Secretary, proclaims the importance of decent neighbourhoods, he is hailed as a philosopher king. Mr Duncan Smith's proposals for the Lords have turned him into a noble defender of democratic rights (as I predicted they would when the Government published its own hopelessly undemocratic and incoherent package). Michael Howard, the shadow Chancellor, is enjoying a new lease of life, celebrated as an enlightened centrist with new, conveniently unspecified priorities over "tax and spend". If a Conservative declared that the grass is green and the sky is blue we would all salute a new and radical approach to the environment.

Something interesting is happening, but it is far too early to conclude that the Conservatives are on the verge of a recovery or a move towards a more fruitful centre-ground. There are some tentative signs of fresh thinking, but so far the new policies – the proposals for a second chamber, for example – are not linked to clearly identifiable principles, while the principles are not linked to any clear policies.

Take the policies that have been adopted since the election. It is a myth that the party has a policy of having no policies. On the international front Mr Duncan Smith has been firmly specific, announcing already that he would support a US attack on Iraq. That is not exactly a move on to the centre-ground. Indeed it is quite something, proclaiming a strikingly hawkish position before the President himself. As for Europe, the new Conservative leader has hardened the party's position against the euro while he personally has maintained that he will be opposed to entry forever.

In a newspaper interview last week Mr Duncan Smith's theme was stridently Thatcherite. He was for a smaller state and lower taxes. Somehow or other this would also achieve an improvement in public services. For years there has been an obsession with the Government's "spin" machine, but this is a supreme example of the art. Mr Duncan Smith echoed Thatcher, Major and Hague, and managed to present it as an entirely fresh approach.

The new Tory leader is also wary of the Portilloite social agenda, to the frustration of his more innovative senior colleagues. John Bercow, the shadow Chief Secretary, is by no means alone in recognising that the Conservatives have to broaden their appeal urgently by showing tolerance to gays. Some of them would like the party openly to support Lord Lester's Bill proposing equality of treatment under the law to gay and unmarried couples. With the Government typically too scared to place its fingerprints near the Bill, it would be a powerful symbolic move.

But Mr Duncan Smith is not sure about any of this. His instinct still is to present the Conservatives as the party of the family, tolerant of others but no more than that. While the media purr there is still concern at high levels of the Conservative party over the limits of Mr Duncan Smith's reforming zeal.

There is also the small matter of the Conservatives' opponents. Although the media are turning and voters are tormented by poor public services this is an agile government, more responsive to criticism than the misleading taunts of arrogance suggest. I am told that the Leader of the Lords, Lord Williams, and Robin Cook are scheming together to ensure there are changes to the Government's proposals on the Lords. Lord Williams had a meeting with Mr Blair on the issue on Thursday. As for the state of the railways, Mr Blair is only too aware of criticisms that Labour should have acted earlier. Thursday's Cabinet meeting was dominated again by the subject of public services, with some candid exchanges.

At one point Mr Blair said to John Prescott: "If you and I had discussed nationalising Railtrack in 1997 it would have been a short conversation." Mr Prescott replied bluntly: "It was a short conversation." This exchange suggests that Mr Prescott had raised the possibility at the start of the first term, that Mr Blair rejected it immediately, suppressed any memory of the conversation, but that he backs the current move as a belated attempt to revive the appalling railways. This is a government that remains alert – sometimes far too alert – to public opinion.

So what is happening? The media honeymoon with Labour – always exaggerated, not least in the media – is over. If Mr Blair goes abroad he is attacked for not being at home. If he is at home he is condemned for being too presidential and interfering. And that is from the left-of-centre columnists.

Compared with William Hague, the worst leader in the party's history, Mr Duncan Smith is proving to be a substantial and subtle figure. What's more, he has the scope to do more or less what he wants. This is the underestimated difference between his position and that of Neil Kinnock in the Eighties. Where, for example, did his proposals for the second chamber come from? An equivalent U-turn from Mr Kinnock would have involved bruising battles with the party conference and the national executive committee. Mr Duncan Smith was able to announce the dramatic change in a newspaper article. Mr Duncan Smith has the political freedom to be formidable. Whether he will make the most of it is still far from clear.