It was called "the biggest cock-up in the tax history of this State". No, it was not the plan to discriminate in favour of two-income families in the tax code, or the rushed tax allowance designed to assuage the anger about the measure.

The speaker was not referring to this year's cock-up but the 1997 cock-up.

The comment was made by Mr Tony Smyth, general secretary of the Irish League of Credit Unions, almost two years ago after the unsuccessful attempt to tax credit union savings. That proposal, like last week's tax measures, had to be rethought after a storm of public protest.

The two debacles had several things in common: the Government failed to see the political implications of either in advance, and both were introduced by Charlie McCreevy.

The "biggest cock-up in the tax history of the State" title is probably still retained by John Bruton for his 1982 attempt to tax children's shoes. After all, that Budget caused a government to fall within hours. But to produce the second and third-biggest in the space of two years is an extraordinary feat for a Minister for Finance.

Charlie McCreevy's political instincts run ideologically counter to the populist Fianna Fail approach. With £1 billion to give away in tax cuts this year, he could have tried to please everyone, giving some benefits to the low paid, some to the higher earners, widening bands, cutting rates a bit, keeping the middle classes happy while at the same time doing enough to keep the trade unions on board for a new social partnership agreement.

But that isn't his style. McCreevy is an accountant with strong views on tax and social welfare and how those systems should be changed. When his views do not coincide with those of his officials, his own views generally prevail. Faced with the choice between doing something bland and something radical, he opts for the latter.

But something isn't right just because it is radical. As Fine Gael's Michael Noonan quipped last week: Pol Pot was radical.

Charlie McCreevy has suffered his most severe political setback this week. A central plank of his Budget - the planned discrimination in favour of two-income couples - has been substantially modified and may be abandoned.

The social welfare provisions of the Budget are also set for substantial revision. For a Minister for Finance's Budget to be treated as simply an opening Government position to be comprehensively rewritten in response to public and trade union opposition is an unprecedented development. Should Bertie Ahern consider a new year reshuffle, there will be serious speculation that Mr McCreevy's position as Minister for Finance may not be secure.

Charlie McCreevy turned 50 in September - a relatively young age for one who has been in the political limelight for so long. An accountant by training, he was first elected to the Dail in 1977, spending 15 years as a backbencher before making it to Cabinet.

As a young Fianna Fail backbencher in the late 1970s McCreevy made it clear that he wasn't going to hang around, serve his time and hope for advancement. Before he was 30 he was helping to oust Jack Lynch as party leader and Taoiseach and replace him with Charles Haughey. At 32 he briefly seized leadership of the anti-Haughey camp, castigating him for not taking the economy in hand.

The Kildare backbencher was sought out by journalists for his views, and never failed to produce colourful language. "Votebuying. . .debasing democacy. . .auction tactics. . .leader cult" were among the phrases used in connection with Haughey's leadership of the party that got him into trouble and expelled from the Fianna Fail Parliamentary Party for a period in 1982.

His outspokenness earned him the loathing of supporters of Haughey, who jostled, jeered and heckled him in Leinster House after one failed heave against the leadership and made abusive and threatening phone calls to his home. After proposing the second heave against Haughey and seconding the third, McCreevy faded into the political background, aware he would get no political advancement so long as Haughey remained leader.

Just as he could not be a time server as a backbencher, when finally elevated to Cabinet in 1992 he quickly made clear he would not be a time server there either. As minister for social welfare he showed a clear vision of what he wanted to do. His aim was to curb the inexorable rise in welfare spending, and to this end he was responsible for the introduction of a series of welfare cuts which became known as the dirty dozen.

His opponents described him as right wing and Thatcherite, just as they did after his 1997 Budget and again this week. McCreevy does not talk ideology but depicts his actions as common sense. But Labour's Finance spokesman Derek McDowell says: "Most right-wingers don't think they are right wing. They think it's all just common sense."

The poor have never done well from his Budgets. As Exchequer revenues have soared, the annual tax package has mushroomed but social welfare increases have remained modestly ahead of the rate of inflation.

His 1997 Budget was consciously designed to help the better off, cutting the top and standard rates of tax as well as slashing capital gains tax from 40 per cent to 20 per cent. The Department of Finance's own figures showed plainly that the more you earned, the greater the percentage increase in take-home pay you got.

And ironically, in light of McCreevy's recent crusading talk of the imperative to slash the number of people paying tax at the top rate, that Budget of just two years ago actually increased the number on the top rate.

Last year's Budget was also radical, but involved an ideological reversal: a switch from tax allowances to tax credits benefited the lower paid, and removed 80,000 low-wage earners from the tax net.

The switch may not have been entirely due to a conversion to egalitarianism: it also served to reduce the fears of inflation that giveaways to the better off engender. Low-income households spending more on basics are much less of an inflation risk than the better off spending it on highly priced houses, expensive foreign cars and other luxury goods.

However, it was business as usual this year, with payback time again coming to the fore. The well off did better, the modest earners got small benefits. However, the decision to give substantial tax concessions to dual-income couples and to withhold them from one-income families was too much radicalism for the backbenchers to bear.

The U-turns on two Budgets have damaged McCreevy's political credibility within his party and Government. If he retains his job long enough to allow him fulfil his ambition to introduce five Budgets (he has done three so far), backbenchers will demand to be consulted about future taxation policy before any more rabbits are pulled from hats on Budget days. For a Minister who believes almost obsessively in the secrecy of the budgetary process, such consultation will not come easy.

The refreshing thing about him is that he still seems to enjoy it even when things are going very wrong. He does not appear to brood on setbacks.

The last 10 days must have been his most uncomfortable in office, yet when he briefed journalists on Wednesday night about his U-turn he managed to give the appearance of being animated and fascinated rather than crushed by the extraordinary wave of hostile reaction to his Budget.

Up to this week, he had no self-doubt about his policy ideas, while displaying a healthy self-deprecation about his political standing. Twelve months ago he told an Ogra Fianna Fail meeting that the Irish electorate "loves flawed politicians.

"It loves the smell of sulphur off a TD or Minister. That is why I'm allergic to spin doctors. Spin doctors, it seems to me, always want to get rid of the smell of sulphur and present you as perfect, with a perfect wardrobe, perfect weight, perfect speech.

"They want to sand down the rough bits that make people interesting." Mark Brennock can be contacted at brennock@indigo.ie