Consider the paradox. We are living, as politicians never tire of saying and everyone under the age of 80 now agrees, through unprecedented economic times. Yet, at the same time, domestic party politics still goes on more or less as before. Common sense and history both say this disjunction cannot last.

Right on cue, this week brought early evidence of a bit of potential reshaping of British politics. If nothing else, the fresh Labour leadership speculation is a sign that the economic hurricane is starting to shake some political trees. But perhaps it is also the start of a wider uprooting.

History suggests that seismic events redraw the British political map, though always in different ways. Both world wars certainly had an effect of this kind. The first war completed the "strange death" of the once mighty Liberals and opened the way for Labour. The second war allowed Labour to re-emerge as a party of majority government and to create the welfare state.

More significantly in the current context, the slump of 1929-31 also rewrought the political calculus. The creation of a national government split both the Labour party and the remaining Liberals, rekindled the Independent Labour party, and gave both communists and fascists their moment on the national stage.

Throughout all these changes there was only one significant constant. The Conservative party won working majorities before and shortly after the first war, before and after the second, and before and after the 1930s slump. Today the polls suggest the party is poised to bounce back once more to form another majority government.

Those polls also suggest something else. Since the turn of the year, they have been marked by three distinct party trends. The Conservatives are strengthening. Labour is weakening. But, third, the Liberal Democrats are recovering too.

Granted, the green shoots of this Lib Dem recovery are distinctly modest so far. There are also 15 months to go before probable polling day, so a lot can change. The headline events have been two scores of 22% in separate polls this month - the same level of support the Lib Dems reached in the 2005 election. In other polls the party still languishes in the teens, as it has done for much of the last three years. Compared with the second half of the last parliament, when Lib Dem ratings rarely dipped below 20%, this is not spectacular. But the momentum is currently upwards and is reflected in net gains in local byelections since the turn of the year too.

If a Lib Dem recovery really is happening, why is this? Part of the answer is that Lib Dem strength reflects Labour weakness and decline. As voters who have stuck with Labour through the early part of the recession lose confidence in Gordon Brown's government and see it as a spent force, a proportion of them are turning not to the Conservatives, as they did for much of the last three years, but to smaller parties, particularly the Lib Dems.

But there is also a more positive logic to the slow accretion of support. Everyone agrees that treasury spokesman Vince Cable is having a good crisis. Cable saw the collapse coming and he continues to set the agenda - currently over bonuses and bank nationalisation. His appeal reaches beyond party. If the Lib Dems have any sense they will put Cable front and centre of everything they do before the election - a double act with Nick Clegg rather like those of the Alliance in the 1980s is being planned.

Thanks to Cable, the Lib Dems also think they may have stumbled upon their Iraq moment. It is certainly possible. Just as the party's opposition to the Iraq war reaped large electoral dividends in 2005 - when a million Labour voters moved to the Lib Dems - so their clarity of analysis and prescription on the financial crisis equips the party to make a powerful pitch to voters in 2010. The longer the recession goes on, the stronger will be its three-part pitch - Labour has failed, you can't trust the Tories and the Lib Dems got it right. It will frame the attempt to defend the party's 63 seats next year. More important still, it provides them with a powerful weapon in the northern Labour seats in which the Lib Dems are looking to pick up new victories when the election comes.

Judged by the big picture, it may seem perverse to argue that this embryonic shift from Labour to Lib Dem is yet a major development. The main shift in public opinion, after all, remains from Labour (and Lib Dem) to Tory. But this secondary Labour to Lib Dem swing, if sustained through to a general election that Labour loses badly, may do more than simply enable Clegg's party to hold its own. If accompanied by the Lib Dems' usual campaign dividend (a 6% improvement from start to finish in both 1997 and 2001, but only 2% in 2005), and by significant tactical voting (a recent internal poll for the party found only 15% of voters would never think of voting Lib Dem) we could be witnessing the first election since 1983 in which there is a real contest for second place in the popular vote. Such a result would have lasting effects on British politics, putting the Lib Dems in a position to reclaim the mantle of progressivism from Labour.

Whether this happens will depend above all on what happens to Labour before and after the election. If current trends are continued, however, Labour is looking at the loss of up to 150 seats. That would take the party back towards its 1983 level of 209 MPs, but without the organisation and collective ethos that enabled the Neil Kinnock-era party to begin the march back to power. Irrespective of who succeeds Gordon Brown, the defeated Labour party of 2010 will be a much weaker, more confused and rudderless party than its 1983 predecessor, in which there was a clear strategy about how to proceed. By comparison, the 2010 Labour party will struggle to articulate what it is for and to whom it wishes to appeal.

A generation ago, there was much hot talk about breaking the mould of British politics. It didn't happen, and the sensible pragmatist will still say such a thing is unlikely. But these are exceptional times and the old political order cannot expect to emerge unscathed. The strange death of Labour England? It can't be ruled out.

martin.kettle@theguardian.com