On Tuesday night, three hours before the defeat of Theresa May’s Brexit deal, I stood on a platform in Parliament Square and called for her to dissolve parliament. If we can’t achieve that, I said, there’ll be an interregnum – during which various combinations of MPs seek to save her government with softer Brexit options. And if that can’t be achieved, we need a second referendum.

Long before I finished speaking I was drowned out, Ceaușescu-style, with chants of “People’s Vote” – which is fine, because it was the People’s Vote campaign which called the rally. But the impatience with political reality indicates a wider problem, which will soon be faced by both sides of the Brexit debate.

There is a large-scale, anti-political mood growing in this country, which is not being understood by the party leaderships, and which will alter the dynamics of any election that eventually gets called.

May’s catastrophic defeat in the meaningful vote on Tuesday night will rightly be chalked up as a victory for Jeremy Corbyn. But in the wider country, it is likely to be understood as showing that politicians, and the institutions of Westminster, are remote and useless for the task of solving the problem the Brexit referendum created. And that intuition might be right.

The greatest Commons defeat for any government in history – 230 votes – is not to be shrugged off as a glitch: any decent Conservative leader would today resign and dissolve parliament. But May has to cling on, and her backbenchers will cling on with her, because what’s at stake is not just her remaining time in office.

What’s at stake is the 40-year project of right-wing economics, which – after its failure – has become sharply focused on free trade, English nationalism and xenophobia. To keep it alive, Corbyn has to be kept out of power through the same treatment – slanders, smears and vilification – that was meted out to his precursor, Ed Miliband.

Any government not in the grip of the blue-blooded, hedge-fund and yachting brigade would begin to dismantle the hereditary privileges the super-rich have built for themselves. But the neoliberal order is set up so that, if a non-neoliberal party gains power, it feels like a system breakdown.

As a result, we have an almost unprecedented political situation, in which the government needs to fall but cannot be allowed to fall. Instead it will fall apart in office. This is why it’s absolutely right for Corbyn to turn the Brexit crisis into an electoral test of strength.

Want to stop Brexit? That needs a different set of MPs. Want Norway-plus? This government cannot live with that, as it would see the Tory party split. Want a second referendum, organised by the Electoral Commission with a legally binding outcome? You need a government to introduce legislation for it to happen.

So all roads lead to an election and a change of government. But just as I sensed that the People’s Vote crowd are alienated from this process, so are the other side. Having seen the introduction of opaque money, street harassment and violent rhetoric into politics, the far-right, skipping around Westminster in their MAGA hats, want to keep it there.

In this situation, there are clear dangers and opportunities for Labour. The most obvious danger is that the long-awaited centrist party will be formed, and that the remaining rump of Blairite MPs in parliament will join it. All sides will be happier in their skins, but if Corbyn’s position of discouraging a second referendum further alienates the membership, it will make such a split needlessly large.

Corbyn is right to press – repeatedly – for an election. He is wrong to rule out Norway-plus as a fallback, because it is the only coherent proposal that has a chance of getting through the Commons and securing agreement in Brussels.

But the bigger failure among Labour decision-makers is one of perception. The entire Labour frontbench faces getting dragged into months of parliamentary procedure issues that leave the rest of the country cold. Without the clear promise that, at the end of it, there will be a second referendum, enthusiastically embraced and advocated by Labour, its own support base will begin to switch off.

It’s only weeks since the left-wing congress members Alexandria Ocasio-Cortez and Rashida Tlaib were sworn in, yet in that short space of time they have changed American politics. They have shown what can be done by young, progressive politicians who embody the values of radical hope in the 21st century, and who don’t give a shit about precedence and seniority. If, as is likely, Bernie Sanders declares for the presidency at the end of this month, he will do so in a atmosphere transformed.

This is exactly what Corbyn needs to seal the deal in an election: new, vibrant voices that embody hope and diversity, with strong communication skills and a fuck-you attitude to the values of the right.

Unfortunately, it is exactly at this moment that Corbyn has chosen to mobilise some of the least impressive people in the parliamentary Labour party to hold the line against an early second referendum and to slap down calls for Labour to adopt a Remain-Reform position in any election that gets called.

If Labour becomes trapped in weeks of machinations in the Commons, engaged in its own bureaucratic machinations, it will begin to look – above all to the young people mobilised against Brexit – like “just another party”. And that’s a problem for a party that wants to represent the progressive half of Britain.

But this moment also contains huge opportunities. Any form of softer Brexit will split the Tory party. Then, those 60-plus English marginals Labour needs to win to form a government will suddenly open up. The moral purpose of the right in Britain will collapse.

On the pro-Leave doorsteps, Labour campaigners will be able to say: “you trusted May with Brexit but she screwed it up. We tried our best to make it happen but it’s failed.” On the progressive doorsteps, Labour will look like a party that can do what the urban middle class themselves don’t want to do: talk to and convince socially conservative workers in small towns.

If Corbyn can emerge from the process saying: “we tried our best but now it's time to end the Brexit nightmare with a decisive popular vote to stay in Europe and rebuild Britain”, it would be an offer that could unite large parts of the electorate.

So here’s what Labour has to do. Once all the soft Brexit options have tried and failed to find a majority in the Commons, Labour must have the courage to return to a Remain-Reform position.

This is implicit in the 2018 conference composite, which speaks of “a Europe-wide struggle for levelling-up of living standards, rights and services and democratisation of European institutions”, in any second referendum.

This position would have the support of the overwhelming majority of Labour’s supporters, members and activists, including the trade unions.

And whether it is in a referendum or an election, Labour has to unleash its own progressive voice. For the past two years it has, of necessity, had to try to make the referendum result work. But if no form of Brexit achievable is acceptable to Brexiteers, the moral force of that referendum result evaporates.

Within the party, most likely at the 29 January National Executive Committee meeting, there will be calls for an emergency conference, or an electronic poll of the membership, to ensure the conference commitments to the second referendum and a Remain/Reform line are upheld by the PLP. This should be facilitated, not blocked or denigrated.

The failure of May’s deal, and of all other potential deals, will sooner or later trigger an election. When it comes we have to stop triangulating with positions we don’t believe in and fight for the principles in our hearts.