GORDON Brown will be singing Auld Lang Syne with unusual urgency this Hogmanay as he reflects on the disasters of the last year. He's not short of auld acquaintances he'd rather forget, a host of shady donors for a start. The prime minister had his annus mirabilis and his annus horribilis in the same 12 months. He finally secured the job he had waited 10 years for, only to find that the prize had turned to dust, after he funked the October election.

But enough of that. Time to look forward to a new beginning. Except the PM is likely to find 2008 even worse than 2007. For a start, the Tories are starting to believe in themselves, for the first time in nearly 20 years. They may not be as far ahead in the opinion polls as Labour were in their later years of opposition, but the Conservatives have broken the 40% barrier in some polls and look to have established a sustainable lead.

This doesn't mean they're likely to win the next election, but they could destroy Brown by robbing him of his majority. Labour MPs are already starting to worry about the future. Their relief at being rid of Tony Blair is rapidly being replaced by a sense of desperation at his successor's failure to connect with the voters.

In 2008, Labour MPs face the unedifying prospect of having to support some unattractive measures in order to satisfy their new leader's determination to show how tough he is, like detention without trial and ID cards. Brown is already using the assassination of Benazir Bhutto as a pretext for stepping up the "war against terror" and building the security state. Plus ça change.

If the country had a clearer idea of what Gordon Brown stood for, other than being British and not being Tony, it might be easier to raise enthusiasm. But Brown has become a political enigma. Most of his recent initiatives, like cutting inheritance tax and limiting immigration, have been pinched from the Tories. Even his reputation for prudence has been tarnished as the consequences of his spending policies have come home to roost in the form of record public sector and balance of trade deficits.

The first of the Blairite critics, David Clark, finally opened his mouth to say Brown was losing it. The silence, until now, of the Blairites has been inspired. They cannot be accused of trying to destabilise Brown - he has been doing that perfectly well on his own, with a little help from the Revenue, NHS and immigration service, who appear to have gone bananas. The loss of personal public records just goes on and on.

Then there is the long arm of the law. Brown is said to be deeply distressed that his party landed him in a scandal just as he was getting his feet under the table in Number 10. As well he might. The dodgy donations affair was largely an inheritance from the Blair era. But that doesn't mean it won't damage Brown. His own protégé, Wendy Alexander, faces an Electoral Commission report and a possible police probe over an illegal donation from a tax exile. If she doesn't handle things well in the coming months, Brown may consider her expendable. Politics is no place for sentiment.

Scotland is shaping up to be a major problem for Brown in 2008. We have learned, incredibly, that the first minister and PM have not spoken since August - despite attempts by Salmond to get Brown on the blower. They will meet at the next British-Irish Council in Belfast in July, but relations are likely to be frosty between times. Salmond wants to press ahead with banning air weapons in Scotland, in the face of opposition from the home secretary, Jacqui Smith. This will lead to demands for the Scottish parliament to get powers over firearms.

Salmond is also intending to move into Brown economic territory by setting up a Scottish Futures Trust to finance big public-sector projects, like the new Forth bridge, by bond issues rather than PFI. The Treasury says it will not accept this fiscal heresy. The Scottish government intends also to scrap the council tax and replace it with local income tax. If this happens, it will likely cause outrage among pensioners, and others, south of the Border, who are already upset about Scots getting free prescriptions, free personal care and a frozen council tax.

The PM will find the Tories eager to surf this grievance, calling for an English grand committee in Westminster, and English votes for English laws. They will be joined by a new kid on the bloc - fresh-faced Liberal Democrat leader Nick Clegg, who looks more like a Cameron Tory than most Tory MPs. Clegg doesn't have the sensitivities to the Scottish Question of his predecessors, Charles Kennedy and Sir Menzies Campbell. The LibDems support an English parliament as a matter of policy. Brown will have to think about how to do a deal with them in the event of a hung parliament.

But hanging over all these difficulties for Brown is the shadow of economic downturn and dislocation. Like most people in British public life, he will be hoping last year's turmoil in the global money markets will turn out to have been a bad dream from which the country will awake in 2008. But everyone in the financial world knows this is not the case. The debt hangover is very real and the foundations of the global banking system are shaking apart. Banks have lent money as if there was no tomorrow - and now tomorrow has arrived.

The Bank of England is expected to continue cutting interest rates to try to help the banks out of their default difficulties. The hope is that people will start borrowing again to finance even more unaffordable mortgages and replenish the banking balance sheets. But this approach is likely to come under serious question in the new year. It was irresponsible lending by banks, principally on housing, that got us into this mess, as the BoE governor, Mervyn King, and the chancellor, Alistair Darling, conceded after the Northern Rock collapse.

Bank of England independence doesn't absolve the government of responsibility for having a credible economic policy. Brown has to reconcile this contradiction in 2008: how, when the government is seeking to reduce house prices, not least by building three million new homes, can it be sensible to bet the future of the economy on re-inflating the house price bubble?

Can the solution to the debt crisis really be found in yet more debt?

In all, it doesn't look like a promising new year for Gordon. Perhaps he should think of doing one of his famous disappearing acts and go awol for the duration.