Shellshocked MPs of the sensible tendency are now seriously alarmed. You find them in a daze around Westminster and its news studio green-rooms stunned by Tuesday night’s failure of the modest Cooper amendment to prevent a no-deal crash-out.

Each day the news gets worse, not forecasts, but actuality. Today it’s the UK motor manufacturers reporting a 50% drop in investment last year and Barclays whisking £166bn of assets off to Dublin, joining a torrential outflow, including Jacob Rees-Mogg’s own investment company.

The Welsh assembly declared yesterday that if Westminster can’t agree, “the only option which remains is to give the decision back to the people” and “work should begin immediately on preparing for a public vote”. No sign of that sentiment in the Commons – but referendum campaigners always knew it would only be the last option when all else finally fails.

Parliament begins to look like it’s on a self-destruct mission which will take the whole country down with it. But outside there are plenty of supporters egging them on waving cheery “No Deal – No Problem” placards. No bad news shifts them or the Brexit fanatics within. Certainly not the European commission president, Jean-Claude Juncker, warning EU leaders yesterday to “prepare for the worst”. Today it looks crystal clear that delaying withdrawal beyond 29 March is utterly unavoidable, as the foreign secretary confirmed on Radio 4’s Today programme.

The Institute for Government (IFG) lists six crucial bills that cannot pass in time, let alone more than 500 statutory instruments. Most haven’t begun in the Lords, where the government doesn’t control the timetable and each needs serious scrutiny. Flashing red on the IFG implementation charts is unreadiness at the borders, with 10 out of 12 border computer systems unready. There are red flashes for how farmers and fishers can sell their produce to the EU in eight weeks’ time. Red too for medicines and medical supplies. Red again for security: no swapping fingerprints, data or DNA, so will criminals escape across the channel? A legal vacuum is actual – not metaphorical – anarchy.

The shock of the failure of the Cooper amendment was that it was brought down by 25 Labour MPs voting against or abstaining: no one expected many beyond the usual Eurosceptics. But they were joined by sensible people – like Jim McMahon, ex-leader of Oldham or Gloria De Piero and others who understand real-world effects of parliamentary gestures. It was shocking too that eight shadow ministers defying a vital three-line whip – the likes of Tracy Brabin, Melanie Onn, Judith Cummins – were not sacked, unlike those forced to resign in June for voting to stay close to the European Economic Area – which later became Labour policy. They were given a wink that they wouldn’t lose their posts. Jeremy Corbyn’s heart never seems 100% in the great Brexit fight – to put it politely. Why was he not rallying his troops at the parliamentary Labour party meeting on the eve of this crucial vote? Each time he does eventually get himself and his party to the right place for these votes – but if he is serious saving us from no deal, he should enforce it on his shadow team.

Q&A What is the Malthouse compromise? Show The Malthouse Compromise is named after housing minister Kit Malthouse, who brokered cross-party talks between Brexiters and former remainers on a possible way out of the Brexit impasse. The result involves redrafting the backstop arrangement for the Irish border which is so unpopular with Conservative Eurosceptic MPs and the Democratic Unionist party, which props up the government. It would also extend the transition period, set out under the previously negotiated withdrawal agreement, until the end of 2021. The extension is designed to give extra time to agree a new trading relationship. Under the plan, the backstop would be replaced with a free trade agreement with as yet unknown technology to avoid customs checks on the Irish border. If the attempt to renegotiate the backstop fails, the Malthouse compromise proposes what amounts to a managed no deal. The PM would ask the EU to honour the extended transition period, in return for agreeing the £39bn divorce bill and its commitments on EU citizens’ rights. This would give both sides time to prepare for departure on WTO terms at the end of 2021 – or to negotiate a different deal. The compromise is backed by the DUP, the European Research Group of hard Tory Brexiters, and former remainers including Nicky Morgan. However, the EU has repeatedly stated that the terms of the Withdrawal Agreement are not open for renegotiation

Although Brexit is a Tory’s disease, spread over decades by their newspapers with anti-EU myths, lies and conspiracy nonsense, at this 11th hour Labour MPs have responsibilities too. Tory leaders pandered to Eurosceptic fever – worst of all David Cameron ceding this lethal referendum – and they will be blamed if the sky falls in. They will be blamed for years of continuing Brexit bitterness. Labour need own none of it – it need back no Brexit plan of May’s. But Labour MPs will need clean hands.

Some remain-voting MPs in leave-voting seats writhe under their dilemma. Lisa Nandy – who did vote for the Cooper bill – makes a good case for “respecting Brexit” for fear blocking it will lead to democratic disillusion and the rise of the non-democratic far-right. But her case is not good enough. With the country at the crossroads, this is where the mettle of every MP is tested to do what’s right even if unpopular – to lead not follow in rescuing the country from present danger.

The likes of Anna Turley in leave-voting Redcar and Bridget Phillipson in Sunderland are among many taking that admirable stand. I hear Labour MPs say that if they lose their seats over this, so be it: they will have done their best to stop a Brexit cataclysm. These are the Edmund Burke-ites – though he was ejected by the voters of Bristol he famously ignored.

Those Labour MPs who broke the whip did great damage. Across the floor are unknown numbers of vacillating Tories who voted to let May have one last forlorn chance at renegotiating her plan, but next time might vote to prevent a no-deal result. Richard Harrington, business minister, says he gives her two weeks, but then will vote to stop no deal. Amber Rudd, Greg Clark, Philip Hammond and other ministers might resign to vote against no deal – and others stand on that brink. But they will only break their own whip and take that plunge if they are certain the numbers are there: looking across at those Labour 25 who wrecked the Cooper amendment, they may calculate it’s not worth making a gallant gesture unless certain to succeed. They need another 12 on top of the 16 Tories who rebelled on Tuesday.

Despite warnings on all sides that no deal creeps closer, I stay determined to believe it impossible the Commons will let it happen. Enough MPs will summon enough courage. The Dromey-Spelman indicative amendment – though only squeaking in – shows a majority ready to stop the worst. Besides, between gritted teeth, despite May calling Brexit her “sacred duty”, I cannot believe she wants a no-deal disaster. She will return effectively empty-handed from Brussels, needing to tell her party only a softer Norwegian-style deal stands a chance.

Delay, rethink, renegotiate – or a final say for the voters – these are all more plausible than the Commons opting for no deal. Though she has badly misjudged every stage of Brexit, even she will surely pull back at the last moment. Why would she want to captain the ship when a no-deal tsunami swamps the decks? Surely not.

• Polly Toynbee is a Guardian columnist