In a Madrid squat I’m doing my best to find out what Brexit means to ordinary, progressive young Europeans. After several attempts to engage them in the niceties of the Norway option and a “people’s vote”, I come to a stark conclusion. They don’t give a shit.

It was the same in Austria the week before, at a business conference. The question “what about Brexit?” is asked in the same way people might ask “and how is your crazy grandma?” They don’t really want a detailed update, just to know that she is alright.

Unfortunately, Brexit is not alright. Since Theresa May’s deal fell apart on first sight two weeks ago it has been obvious that it cannot pass the House of Commons. May’s hapless attempt to engage the people by going to places but not talking to anybody - her modus operandi in all campaigns - is not helping.

Meanwhile, Mark Carney’s assessment of the no-deal scenario for Brexit has killed it stone dead as a realistic option. The economic damage predicted – by the most authoritative surveillance body we possess – is unthinkable. Commercial property prices would halve; house prices would fall 30 per cent and interest rates – close to zero since the 2008 crisis – would rise to a painful 5.5 per cent.

The reality the British electorate must absorb as they chew over the subject this weekend is: there’s either going to be a different deal or we are going to remain in the European Union.

That, in turn, has sharpened the tactical dilemma for Labour. Corbyn’s next move could make or break his reputation – and the choices are so overlaid with ideology and emotion that I want, here, to try and weight them dispassionately.

First, let’s survey the balance of forces within the Parliamentary Labour Party. There are around 10 Blairite MPs itching to split and form a new, neoliberal centrist party. They need not just a trigger, but a trigger big enough to bring hundreds of councillors and ward branch secretaries with them, to justify the hype the BBC is preparing to bestow on them, and to persuade Ofcom to give them a platform in any subsequent election. This is a real threat.

There are between four and 10 philosophically pro-Brexit Labour MPs, if you count Frank Field who is outside the whip. They face reselection, but are determined to go down fighting on principle. They are not majorly relevant at this moment.

But there are maybe 30-60 Labour MPs who represent north of England constituencies who are keen to take any Brexit deal on offer. Caroline Flint, their strongest voice, put the arguments clearly: her constituents want it done and dusted and we need to “move on” to the bread and butter issues Labour can win on. May was relying on this group to vote her deal through, but it is so bad that they cannot. The right-wing pressure among the electorate in places like Don Valley, Wigan and Stoke is now against the deal, not for it.

However, a significant shift occurred when, during her visit to London, Nicola Sturgeon proposed to Corbyn and Plaid Cymru leader Adam Price that they form a “coalition of opposition”, with the aim of forcing May to renegotiate, with a Norway-plus deal as the outcome. Conservative backbencher Nick Boles, who had been proposing “Norway for now” as a transitional outcome, then amended his proposal to “Norway forever”.

This has created a clear fallback option around Norway-plus, which Michael Gove and Amber Rudd in cabinet are said to favour. However, Boles’s version involves voting for May’s withdrawal agreement as is, but signalling in the future partnership document that the Norway option is preferred. This cannot suit Labour.

First because preferring the Norway option is not the same as securing agreement to it. Second because - unless Labour can show it has attempted to deal with its own voters’ concerns over freedom of movement, it faces a backlash in the Leave-voting constituencies. Both Boles and former Labour home secretaries Charles Clarke and Alan Johnson have called for the Norway-plus deal to come with an “emergency brake” on free movement. But unless this were clearly permitted in the future partnership document it would be hard to sell.

Third, all the sentiment among Labour’s membership, and among Corbyn’s supporters in particular, is in favour of a second referendum and a Remain vote. This was reflected in John McDonnell’s admission that, if they can’t bring the government down, they have to go for a second referendum, and that he personally would vote for EU membership.

Haunting the whole tactical discussion within Labour is how they assess the threat of a right-wing backlash in working class areas. It’s obvious Ukip and its new alt-right cadres will try to lead a street-level mobilisation against the “betrayal of Brexit”. The issue is whether Boris Johnson, Zac Goldsmith and Jacob Rees-Mogg will give this movement the cover of respectability, or shun it like the plague. If the Tory hard right go all in alongside the neofascists, we will have our very own Trump movement to deal with.

However, any of the possible outcomes could trigger this movement. All Labour needs to do is to show that it tried to come to an agreement with May over a deal it could support in parliament, but she - through duplicity and incompetence - made that impossible. “We tried to help May do Brexit but she fucked it up” will resonate excellently on the doorsteps of Leave voters.

If you’re a Labour supporter clamouring for the party to go directly for a second referendum and to signal a Remain vote, in advance of 11 December, you have to have calculated that the risk of the right-wing plebeian backlash is containable, or that you are too far away from the old strongholds of Ukip and the BNP for it to matter in your life.

But there’s another possibility: the moral collapse of hard Brexit among the right-leaning electorate. Something like this happened in Stoke, when in 2017 the Ukip vote switched to the Conservatives. Analysing the social media posts of white nationalist Ukip supporters in the area, activists saw sentiments expressed like “if it’s not a revolution I’m not interested”. If Ukip was “just” a political party, and not preparing for a civil war, then politics was just politics. This could happen nationwide, once the hard Brexit fantasy evaporates. But I would not bet on it.

Labour’s strategic goal is to trigger and win a general election. That is justified: May had one job, to do a Brexit deal, and she failed. She failed because the Tory cabinet could not agree an honest approach to the compromises necessary to get out of Europe - both they and she have to be booted out of office.

But in a general election, what would Labour fight on? Its frontbench spokespeople, Barry Gardner and Keir Starmer, have become adept at listing Labour’s objections to all outcomes: Norway cedes too much control, May’s deal cedes control without influence etc. In an election after which you are likely to govern, you have to be straight about what kind of Brexit you want. If it’s so close to Norway that it’s really Norway, the media will find out.

Because the PLP is pulling both ways on this, only a decisive statement of intent and principle can get Labour to the position where it says: Remain is better than any deal we can come up with. That was the importance of McDonnell’s intervention. He followed it, a day later, with a call for Labour members to mobilise on the street against Ukip’s demo on 9 December - signalling the belief that the new far right is not to be feared but taken on and defeated.

But as it stands, were May to call Corbyn’s bluff on 12 December, and call a snap election, Labour’s Clause Five meeting would be faced with one issue only: are we going to the people to stop Brexit, or to waffle about some “better Brexit” that nobody will believe in? Given the weight of the trade unions and PLP in that meeting, I cannot see it avoiding a clear call to put Remain in the manifesto.

People frustrated by Labour’s lack of clarity often put it down to Corbyn’s supposed covert support for a left-wing Brexit. It is nothing of the sort. It is a genuine tactical problem that comes down to: which revolt can we survive?

The departure of 10 perpetually toxic MPs to form a Blairite party would be greeted with relief; but if they took with them a large, angry section of the membership frustrated at a missed opportunity to stop Brexit, that would damage Labour more seriously.

The rebellion by 30-60 Labour MPs who might vote for a Tory-proposed Norway deal is, despite its size, more survivable: theirs is a difference attributable to constituency pressure, not malice, and they are largely loyal to the Corbyn project. If they did so against the whip, Labour could justifiably claim it had tried to stop Brexit.

But the prize is not simply a general election. It is an election in which your opponent, the Tory party, has fallen apart. That would deliver a solid Labour majority and create the possibility of a landslide for the progressive parties in parliament, which could bury free market cruelty forever and bring institutional democratic change to the UK.

So for me, here’s how Labour should play things. Defeat May’s deal and pass a “no to no-deal” amendment. Then table a no confidence motion. Faced with a Norway-style proposal from Boles, Labour should whip against it, on the grounds that it could only be negotiated by a progressive government, not a zombie Tory administration. If the numbers were there for a progressive coalition in parliament to propose and design its own Norway-style option, it would be worth trying. I suspect they are not.

If May’s government falls, or if she calls a snap election, the question will be: do Labour’s members, and the pollsters at its Victoria HQ, think they can win an election on a Remain and reform ticket? It will be a once in a lifetime gamble. But if they believe they can, they should try it. It is route one to cementing a grand social coalition around Labour’s domestic project and neutralising the right. But it should be based on evidence, not gut feeling.

If not - and all Remain obsessives should take this seriously - Labour should promise to attempt its own Norway-style deal once in office, with the guarantee of a second referendum and a Remain option on the ballot paper. It should not, in other words, do a kamikaze job in December just to assuage people who give money to the Guardian.

In all this, there is a very important audience: the European electorates and their politicians who, as I say, are bemused. What we do in the next four weeks, and the way we explain it, will shape our moral and ideological relationship with the European demos, not just the de jure outcome.