The idea of the federal government operating another health-insurance business to compete with Blue Cross/Blue Shield and hundreds of other private plans has crashed and burned -- the victim of a massive grassroots protest movement and deepening fears and divisions among Democratic lawmakers.

The White House gave Health and Human Services Secretary Kathleen Sebelius the go-ahead Sunday to suggest that the administration was not necessarily wedded to a government health-insurance plan for millions of uninsured Americans. But in a bit of good-cop/bad-cop playacting, White House spokesman Robert Gibbs insisted Monday that the president was still behind a government plan and that the news media had misinterpreted her remarks. Other West Wing officials said his positions had not changed, though they left him some wiggle room.

"The goals are choice and competition. His preference is a public option. If there are other ideas, he's happy to look at them," Gibbs said. But the Democratic Party's dominant left wing smelled a hasty retreat from the ideological core of Obama's nationalized health care plan. The party was fully at war with itself, and action on health care, this year at least, appeared to be a much shakier prospect.

Democratic Sen. Kent Conrad of North Dakota, a leader in the health care debate who is pushing state and regional insurance co-operatives, pounded another nail in the public option's coffin Sunday, declaring that Democrats did not have the votes for it in the Senate.

Party liberals who have been among Obama's strongest supporters were furious, blaming the White House for a botched, weak-kneed strategy and -- worse -- betrayal of a solemn campaign promise to millions of voters.

"I wonder if the White House truly understands the depth of anger they'll face from the progressive side if they fail to pass health care reform with a strong public option," screamed Markos Moulitsas, founder of the radical Daily Kos Web site that has become the bible of the left's ground forces.

"We haven't busted our [expletive] the last four years to pass bank bailouts and give insurance companies everything they ever wanted. If we wanted that, we'd be Republicans," Kos wrote Monday. If Democrats "can't do the right thing here," he warned, he would lead a revolt "to rid ourselves of the corporatist hacks that infest our party."

Former Democratic National Committee chairman Howard Dean's Democracy for America, a liberal grassroots group, sent an e-mail to its supporters saying that "a health care bill without a public option is DOA in the House. Period." Despite denials of a changed position, the White House has seen the handwriting on the wall, tacitly acknowledging that they were losing public support at the grassroots level because of the fierce opposition at hundreds of town-hall gatherings during Congress' month-long August recess. Continued...