Julia Gillard is parading as the great reformer in the Hawke-Keating tradition. But her government's grand reform of the Murray Darling system is imploding in substance and exploding politically.
The Murray Darling Basin Authority is now talking about reducing its proposed allocation of water for the environment.
We've reached this point, less than a month after its guide was released, because the government took fright when it heard the cries from local communities and irrigators.
The battle has turned to conflicting legal interpretations. In a nutshell, the authority believed it was obliged to give strong precedence to the environment, while the government has produced advice suggesting more attention can be paid to community and farmer needs.
The situation has become a shambles. How could the legal position be in such doubt at this late stage?
One reason is that the legislation was drawn up without the Commonwealth having full constitutional authority in the area. It's based on the Commonwealth's external affairs power; this leaves the power in practice rather stretched.
Obviously the government, despite its robust talk of reform, is unwilling to go ahead with water cuts of the magnitude in the guide.
So, somehow, it has to get them modified. One way is to argue to the authority it is being too purist in its legal interpretation. Another is to use the minister's right to direct the authority at a later stage.
But there are potentially all sorts of complications, including the risk of a High Court challenge from environmentalists.
Gillard can accuse the opposition of going soft on reform, but when it comes to the Murray Darling the government is right up there.
Michelle Grattan is Age political editor.