Last Wednesday at 2.30pm Jeremy Corbyn’s shadow cabinet gathered as usual in the Norman Shaw North wing of the House of Commons for their weekly meeting. Tea and plain biscuits were served – and the mood was serious to the point of being almost sombre. Particularly so, initially, because discussion focused on a disturbing report on poverty in the UK by the UN’s rapporteur Philip Alston. The shadow secretary of state for work and pensions, Margaret Greenwood, made a presentation, and for over an hour members of the Labour top team expressed dismay at the legacy of Tory austerity on the poorest in society.

But those present were anxious and earnest for another reason. They knew Labour had to decide what to do next about Brexit. The fact that Theresa May’s deal with the EU was looking more likely, by the day, to be defeated in the House of Commons on 11 December was not just a looming catastrophe for the prime minister. It also required, urgently, a clearer strategy from Labour.

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What would Her Majesty’s official opposition, split like the Tories over Brexit and ultra-cautious in every move until now, do amid the chaos that would inevitably follow defeat for the prime minister?

With less than half an hour left before the meeting had to end, because MPs had to go to vote, the shadow Brexit secretary, Keir Starmer, opened a discussion that could well, one day, feature in the history books. According to several sources who were there, Starmer made clear that if and when May lost the “meaningful” vote, Labour had to be ready, as he put it, to “move quickly through the gears”. What he meant was twofold, said those in attendance. First he was clear that Labour should waste no time in calling a no-confidence vote in the government, which if passed could lead to a general election. Several shadow cabinet ministers agreed that this should happen within 24 hours.

But, given that few at the top of Labour (Jeremy Corbyn, shadow chancellor John McDonnell and Starmer included) believe such a no-confidence motion has much realistic chance of succeeding – as Labour does not have the numbers – Starmer’s reference to moving “through the gears” meant that further moves had to be prepared.

“What was clear and implicit from what he said,” said a shadow cabinet member, “was that if and when we fail with a no-confidence motion, we must be ready very quickly to take up the option of a second referendum, if that is the best route to take. The danger for us of not doing that could be that we would have no policy at all.”

Facebook Twitter Pinterest The People’s Vote march in central London in October. Photograph: Antonio Olmos/The Observer

Up until last Wednesday, Labour had taken refuge in the convenient, if slightly implausible, argument that it could bring down the government by forcing an election, and then somehow renegotiate a better deal for the country once in power. That tactical line served a split party well, keeping enough people on both sides of its Brexit divide tolerably content.

But with the vote fast approaching and a TV debate between Corbyn and May pencilled in for next Sunday, it could hold only for so long. Starmer and others could see that if Labour failed to force an election, and with the EU adamant that it will not renegotiate in any substantial way, the opposition looked like running out of policy options.

Several senior figures at the meeting strongly backed Starmer, including Tom Watson, the deputy leader, Tony Lloyd, the shadow Northern Ireland secretary, and Richard Corbett, leader of Labour MEPs in the European parliament, who all specifically said the party should prepare for the option of a second referendum. Those at the meeting said it was clear that Remain would have to be on the ballot paper.

Crucially, several shadow cabinet ministers confirmed that Corbyn offered no real objection to the proposal, although the Labour leader stressed the need to move step by step, with the first task being to ensure that the prime minister’s deal was voted down. Watson was particularly strong on the need for clarity. McDonnell too appeared to have come round to the idea, saying in a BBC interview the same day that it now looked “inevitable” that Labour would back a second referendum.

Only two shadow cabinet members – the campaign coordinator Ian Lavery and shadow lord chancellor, Richard Burgon – are said to have spoken out against, warning that pro-Brexit Labour voters would never forgive them. Lavery said, according to one source: “If we support a second referendum we will never get the keys to Downing Street.” Those who agreed were, though, in the minority.

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Labour’s progress towards backing a second referendum has been slow and difficult. But pressure has been building, not least because the mass membership supports one. For Corbyn, a lifelong Eurosceptic, it has clearly been painful. Only two weeks ago he was saying the party had to honour the result of the 2016 referendum, meaning no second vote.

And the party is not there yet. Another referendum would have to be officially endorsed by the shadow cabinet, and possibly the parliamentary Labour party. Even then, legislation would have to pass through the Commons and then decisions about the question to be put determined by MPs and finalised by the Electoral Commission. Tory MPs would have to come out in favour, as some Labour Eurosceptics such as Kate Hoey and Graham Stringer would oppose it.

We are some way off yet. But there is a clear movement. On Friday Sam Gyimah resigned as universities minister, saying a second referendum should be considered. With parliament increasingly deadlocked and Labour moving “through the gears”, it is starting to look like there may be no other viable option.