It was a scene of breathtaking political theatre. Arlen Specter, the veteran Pennsylvania senator, stood in stony-faced shock as one of his constituents delivered a furious tirade just a few feet away. "One day God is going to stand before you, and he's going to judge you and the rest of your damn cronies," bellowed the senator's grey-bearded adversary in an encounter replayed countless times on American television. "Then you will get your just desserts."

Like his fellow congressmen, Specter has been gauging opinion on proposed reforms at public meetings known as "town halls".

President Barack Obama and his Democrat allies in Congress are pushing plans to overhaul the US health system - currently a predominantly privately-run for-profit set-up - by introducing a government-backed insurance programme. Critics denounce this as a move towards cripplingly profligate and inefficient "socialised medicine". They have dragged Britain's National Health Service into the debate as a prime example, they claim, of the waiting lists, bureaucracy and rationing of medical care that will follow. Obama and his supporters counter that reform is crucial to provide universal coverage. This, they say, will reduce skyrocketing premiums and soaring costs that are shackling US businesses.

At immediate stake is the future of a health industry that is worth $2.4 trillion (Dh8.81 trillion) a year and represents one-sixth of the entire US economy. But while differences over health care reform are profound in their own right, this debate has also become a proxy for a much more visceral battle about the heart and soul of the nation.

For many Americans, these proposals have stirred up a broader wave of discontent at the role of "big government" in their lives. This resentment has exploded in the town halls - or "town hells", as some have been dubbed - where allegations of euthanasia programmes have flown in one direction, and accounts of malevolent insurance companies denying cover in the other.

Both right and left view the war over health reform as the key prize in American politics - a battle that will determine whether Obama's administration is judged a success or failure. The already red-hot debate intensified when Republican foes accused reformers of wanting to introduce government "death panels" to assess who merited treatment, feeding into rumours alarming many old people that there would be some form of euthanasia programme. In fact, there were proposals to reimburse doctors for counselling on "end of life" treatment with patients. This brought accusations that the plug would be pulled on the old or sick if bureaucrats decided it was too expensive to treat them.

"The suspicion of so-called socialised medicine is huge in America," said Sir Harold Evans, the long-time British chronicler of the US, whose memoir My Paper Chase is published next month. "On top of that, there is a perfect storm of frustration about unemployment, immigration, the financial scandals and the role of government. It is all feeding the raw maw of American politics and the Republicans are happy to foment this."

The president's foes have christened the reform plans "ObamaCare". Yet Obama initially took a hands-off approach to the debate, encouraging Congress to come up with its own bill. But the hands-off tactic has backfired as the push for reform got bogged down in congressional committees. The White House belatedly stepped in and Obama urged legislators to reach a deal before summer recess. Not only did that not happen, but the president's intervention seemed to be railroading a decision to an artificial timetable, fuelling public discontent.

Meanwhile, anti-racist groups say they have monitored an alarming increase in violent rhetoric and threats aimed at Obama as the debate over health care intensified. Recent weeks have certainly taken their toll on the president's popularity. His average job approval rating has slid 10 points to 53 per cent. But perhaps the clearest indication that Obama's honeymoon is over comes from the online political memorabilia seller Cafepress.com, a cultural barometer of who's up and who's down in public popularity. Of its approximately three million Obama products, about one-third are now anti-Obama. In particular demand are re-worked versions of some of his most catchy slogans - most notably, the title of his memoir Audacity of Hope. The alternative version reads Audacity of Hype.