IT was Michael McDowell who came up with the (very prescient) line that the PDs faced the choice of being "radical or redundant", but it might just as well apply to Fine Gael right now.

These are difficult times for the main opposition party and they could potentially get more trying in the coming months.

For the best part of two years, it seemed that Fine Gael was destined, after three decades on the margins, to secure a general election victory. It just had to avoid any cataclysmic mistakes and power was there to be taken.

That is no longer the case. Fine Gael will certainly be part of the next government. But the extraordinary rise of Eamon Gilmore and Labour over the past year or so means it can no longer take it for granted that it will dominate, or even be the main player, in that coalition.

Even allowing for a likely softness in some of the Labour support and the handicap that party faces because of a lack of organisation in certain constituencies, the polls over the last five months clearly indicate that Gilmore's party could win as many seats – or as close as makes no difference – as Fine Gael.

The polls could show a further tightening in its support for Fine Gael over the winter. And though it might not pan out like this, there is a plausible argument that, while it will be vilified by much of the electorate for its hairshirt budget in December, Fianna Fáil might get a small lift in support from those voters who believe such pain is unavoidable and best faced up to. It happened after last year's budget.

Gilmore and Labour, meanwhile, will do what they have cleverly done for the past two years: strongly oppose every spending cut and tax increase and provide an outlet for angry and frustrated voters by telling them what they want to hear.

Fine Gael risks getting squeezed in the middle. It can't and won't play the game that Labour is playing for a variety of reasons. Its core support and many of its TDs wouldn't wear it – it's just not in their DNA. And Enda Kenny simply can't match Gilmore in the anger rhetoric stakes. Besides, Labour already has that territory sewn up.

On the other side, there is the worry that if Fine Gael takes the fiscally responsible approach it will be associated with all the obvious negatives that come with budget austerity – without getting the credit for actually doing what is so obviously needed.

It is a conundrum for Fine Gael. And there are no obvious or easy solutions. But it's here that the 'radical or redundant' message applies. It is easy to generalise and simplify matters when analysing politics but it does seem as if Fine Gael has erred on the side of 'playing it safe' in recent times. That was most noticeable last June after Kenny faced down the leadership challenge. His performance in that week seemed to mark a turning point for the Mayo man. He was decisive, tough and cool under pressure. He looked and sounded like a leader. But to this observer, at least, instead of building on that by trying to set the agenda for the coming months, he appeared to retreat back into his shell. Other than the constant calls for a general election, which isn't going to happen until the spring at the earliest, and the disastrously misjudged stand on pairing, it's hard to think of anything that has come from the Fine Gael leadership since then.

It is almost as if, subconsciously at least, Kenny and the other leading figures on the front bench believe that they just have to get to the finish line and the top prize will be theirs.

If that is the case, then they may be in for a rude awakening. The old adage about elections being lost by governments not won by the opposition no longer applies. The government has already lost the next general election but it is now an open competition between Fine Gael and Labour as to who will 'win' it.

Labour has out-thought Fine Gael up to now and if the latter is to regain supremacy, then bold and radical actions may well be required. It would be folly to go bald-headed for Labour – Fianna Fáil remains the real enemy and the public don't want to see the opposition parties bickering – but there is nothing to stop Fine Gael showing up the lack of substance in the Gilmore message.

Kenny actually began to do this last weekend with his pointed comment that only Fine Gael could be relied upon to do the right thing by the economy. It was certainly a long overdue dig at Labour. But actions are also required.

Fine Gael needs to start taking a stand on key issues that will put it to the fore. Leo Varadkar, who is behaving more and more like a politician of serious substance, had the right idea last weekend with his suggestion that the upcoming budget should seek savings of €5bn or even €6bn to really tackle the deficit. There are, of course, serious cons as well as pros to such an approach. It is probably not politically feasible, but it is certainly radical and it sets Fine Gael apart from the rest.

The Croke Park deal and public sector reform is another issue on which Fine Gael should consider taking a stand. It's becoming increasingly obvious that the deal will have to be revisited. The party won't get any thanks from public servants for pointing that out but the public sector has never been fertile ground for Fine Gael anyway.

The point is that Fine Gael needs to stop playing safe. Politics has changed not just in the past two years but in the past two weeks. The level of crisis facing the state has finally hit home and the country's sovereignty is now at genuine risk. Only brave and decisive leadership will pull us back from the brink. The government is too damaged in the eyes of voters to provide that leadership beyond the lifetime of the current Dáil; Gilmore and Labour have taken a calculated decision that it won't. So there is an obvious niche in the market for Fine Gael to fill.

The next general election is no longer Fine Gael's to lose but, if it is willing to take some risks, it is still there to be won.