It is not only distance that lends enchantment. So it is necessary for me to admit that I feel both affection and admiration for the three old heroes whose friendship and rivalry is the subject of Giles Radice's fascinating study of three exceptional politicians. But Friends and Rivals is far more than an examination of the relationships between complex and, in some ways, conflicting personalities. It is the best analysis I know of why the Labour Party, apparently so strong in the mid-1960s, had become unelectable by 1983. It was led during much of that period by Harold Wilson and Jim Callaghan - both, in my view, badly underrated prime ministers whose reputations are now being properly rehabilitated. But to Radice's generation, future success - the natural party of government retaining office for most of what remained of the century - depended on Tony Crosland, Roy Jenkins and Denis Healey. They were, or should have been, the future. Although his affection for them is as great as mine, Radice believes that they failed in their duty.

If the three men had been able to combine better in the late 1960s, Jenkins may have been able to replace Wilson as Prime Minister and Labour would probably have won the 1970 election. Radice lists other, equally plausible examples of turning points in Labour's history that might have been negotiated more successfully if the three men (or Jenkins and Healey, after Crosland's death in 1977) had worked more closely together.

Radice's descriptions of the complicated relationships catch exactly the ambivalence of the men's attitudes towards each other. The affectionate unease began long before any one of them thought of himself as a potential prime minister. In his autobiography, Roy Jenkins describes the rejection of his application for an Oxford lectureship in the language of lucky escape: "It would have been a great mistake for me to have worked directly under Crosland, close and on the whole happy though our relationship was in those days."

To the end, Crosland remained Jenkins's "most exciting friend". But he never thought of him as a credible party leader. On the other hand - although Jenkins and Healey were never personally close - in 1967, on "Torrey Canyon weekend" (when the Royal Navy was trying, with no great success, to burn off the oil from a stranded tanker), Jenkins, then home secretary, told me that Healey, then Secretary of State for Defence, would make a far better prime minister than Wilson.

There is no doubt that, from time to time, the trio irritated each other almost beyond endurance. The more successful Jenkins became, the more Crosland and Healey laughed at what they saw as his pretensions. Neither the success nor the jokes encouraged a harmonious partnership, particularly because Jenkins began the long journey to eminence as the junior partner. As Radice bravely makes clear, nobody who knew the three men at Oxford or in the army would have believed that it would be Jenkins who became the most successful man of his generation.

However, it was their different attitudes to politics, not their self-esteem, that kept them apart - a divergence which is best illustrated by the story of the IMF crisis of 1976. The events of that summer did almost irreparable harm to the idea of democratic socialism. Radice describes the trauma of those troubled days with admirable authority, balancing the occasional moment of gallows humour against the long hours of anguish and anxiety. And he succeeds in representing that seminal event as the foundation of Labour's ideological self-confidence, without abandoning his basic thesis that the damage would have been at least moderated if the rivals had worked together more closely. It would. But they could not. Jenkins, despairing of the Labour Party, had left for Brussels. Healey and Crosland represented the conflict between philosophy and practicality which the party could not resolve.

As Radice rightly argues, there are various explanations for the causes of the IMF crisis. But however it began, the result was a dramatic reduction in international confidence and the fear that sterling would collapse. It was generally believed that the situation could be redeemed only by an international loan that required the government to make certain economic "adjustments", to convince the IMF that the loan would not be squandered. Denis Healey, by then Chancellor of the Exchequer, thought the price had to be paid. Tony Crosland, the foreign secretary, did not. Neither did I.

Radice rightly reports that, in the cabinet, I alone "backed Crosland to the end, but later conceded that after all, Healey had been correct". In fact, I was eventually convinced of Healey's view, graphically expressed at the time by Gavyn Davies, then economic adviser to the prime minister. The "markets wanted blood", and had to be propitiated by an unreasonable sacrifice. As we now know, the markets based their demands on Treasury statistics that turned out to be categorically wrong. The sacrifice for which they called was a reduction in the public sector borrowing - a result achieved partly by cuts in social services. In fact, it turned out that the Treasury had grossly overestimated the size of the public sector borrowing requirement. The cuts were unnecessary.

Yet Healey was right. At that moment, in 1976, survival required the government to pay the market's price, which amounted to providing proof that it would abandon socialism in favour of stability. Tony Crosland found that too unpalatable to swallow. It would be foolish to make a judgement about the alternative merits of the Healey and Crosland positions. These two men, of formidable intellect and commitment, had fundamentally different views about the business of politics.

And, squabbles and niggles aside, it is the intellect and commitment of Crosland, Jenkins and Healey that shine through on almost every page of Friends and Rivals. The book is an adventure story, because, despite their human failings, the three principal characters all have heroic qualities. When next I read a second-rate journalist in a third-rate newspaper explaining that the train of politics attracts only moral pygmies, I shall turn again to Giles Radice's splendid triple portrait to remind me that giants once walked the land.

Roy Hattersley's A Brand from the Burning is published next month