Receiving his “frothy coffee” in Pontypridd’s Prince’s cafe, Owen Smith stopped mid-sentence to express some amusement. “I tell you it is the first time I have ever been given little biscuits and a posh cup in here,” Smith said, looking up at the owner David Gamberini, as his order was placed on the table. “Seriously, I would have a mug normally,” the MP added, examining the refreshments in front of him.

It emerged that behind the counter there had been a discussion about how to mark the arrival of a journalist from the Observer. “He’s come from London,” Gamberini explained to the MP, who is seeking to become the 25th leader of the Labour party.

Familiarity breeds contempt. Prince’s, one of a handful of handsome Italian cafes in Pontypridd that were founded by émigrés who came to the Welsh valleys after the second world war, is described by Smith as his “unofficial campaign headquarters”.

Yet, as it stands, the recently resigned shadow work and pensions secretary is unlikely to hold out much hope for the red carpet treatment anywhere in the country. He is largely unknown to the general public, as John Humphrys kindly pointed out to him on the BBC’s Today programme last week. Even his rival in the battle to be the so-called “unity candidate” to challenge Jeremy Corbyn’s beleaguered leadership, Angela Eagle, has more name recognition after her 25 years in parliament, albeit you would be unlikely to hear her spoken of down at the metaphorical Dog and Duck.

And the Smith campaign has taken a while to grind out of first gear. The MP’s brother has been seriously ill, only leaving hospital last week. The candidate says he had no forewarning of the events that have blown Labour apart in the last fortnight. And Team Smith’s official launch, now due for Sunday, was postponed due to events in Nice. Yet it is to the MP for Pontypridd that Westminster watchers believe MPs are turning in the larger numbers (around 90 and counting, it is believed), and across Labour’s political spectrum, as the ceiling looks ever more likely to fall in on the party.

Smith proposes a second referendum on the terms of Brexit and believes there is a chance the UK will not leave the European Union. Photograph: Gareth Phillips/The Observer

The father-of-three’s selling point to the members is that he has not been part of any plot and was an enthusiastic convert to Corbynism when Andy Burnham, his preferred leader, came a distant second in the contest last September. “I think Jeremy has been a fillip to the Labour party in lots of ways and let us get back to a more traditional left Labour position, one in which I am more comfortable than arguably I have been at any point,” he said.

But, while in agreement with Labour’s governing body, the National Executive Committee, that Corbyn should be on the ballot paper in the leadership contest, Smith nevertheless decided to resign and oppose his leader when a meeting between Corbyn and the so-called soft left of the shadow cabinet, including shadow energy secretary Lisa Nandy, led to rancour. “We asked to meet with Jeremy on his own and John McDonnell barged in a couple of minutes in,” Smith said of the meeting held in the wake of Corbyn’s sacking of shadow foreign secretary Hilary Benn and at the start of mass frontbench resignations. “I said: ‘I’m worried that, if not you, others around you are sanguine about the party splitting, otherwise I think you would be looking to compromise.’ Jeremy had no answer to that.

“John McDonnell, who was getting increasingly irate during the meeting, just shrugged his shoulders when I asked him directly if he wants to split the party. He said: ‘If that is what it takes’.”

The account has been described as “complete rubbish” by McDonnell.

Smith said he had further meetings with Corbyn as resignations from the front bench came thick and fast. He suggested to Corbyn he could be elevated to the position of “president or chair”, and that his legacy could be underpinned by a rewriting of clause four to commit the party to delivering equality. “He said: ‘I am not going to do anything other than sticking in where I am.’ ”

In truth, though, for all the efforts to protect Corbyn’s pride, Smith admits he had long shared the doubts of his colleagues about the person leading them. “Man-management is clearly not a great skill of Jeremy’s,” said Smith, perhaps understating what many of his colleagues have come to conclude was not just an irritating foible but an inexcusable failure of a man who professes a desire to be prime minister.

The Observer has learned that the MP for Bristol West, Thangam Debbonaire, learned of her appointment in January as a shadow arts minister when the communist newspaper, the Morning Star, in receipt of a press release, called her office. She was being treated for cancer at the time.

When Corbyn subsequently learned that someone else was already carrying out part of the role, he unappointed her 48 hours later without informing her, only to reappoint her when Debbonaire sought and belatedly received a meeting. “That’s what he was like to me when I had cancer,” Debbonaire said, when approached for comment.

It has emerged that the popular Neale Coleman, his chief of staff, resigned when the leader announced a policy on banning dividend payments by companies that didn’t pay the minimum wage without consulting him.

Former shadow health secretary Heidi Alexander had difficulties getting policy decisions from Jeremy Corbyn. Photograph: Ray Tang/REX/Shutterstock

The shadow health secretary, Heidi Alexander, had to stage a physical sit-in outside Corbyn’s office in order to get a decision from him on Labour party policy on the NHS. And Corbyn took nine months of badgering to agree to meet the major environmental charities, including Greenpeace and the RSPB, only for him to cancel it when the shadow environment secretary, Kerry McCarthy, who had been organising the event, resigned a fortnight ago.

And Smith has had his own frustrations to share too. “On [the government’s U-turn on cuts to] tax credits and personal independence payments [to the disabled], I led those campaigns. I didn’t get any instruction or leadership from Jeremy about that,” said Smith. “He was quick to talk about them once we had secured the victories. And on Europe I don’t blame Jeremy for Brexit, but he was pretty half-hearted.

“I don’t think he ever really understood the scale of the disaster. Arguably why would he? It wasn’t something he really talked about before. In fact, he advocated it.”

Smith is proposing a second referendum on the terms of Brexit and believes there “is a chance” that the UK will not leave the EU if there is a credible Labour party to make the case.

Those complaints could, of course, be dismissed as the negative briefings that accompany any dispute over the leadership of a political party.

Smith himself has been on the end of some of those sorts of complaints from both the Eagle and Corbyn camps in recent days, in particular about his past employment at the pharmaceutical giant Pfizer, where he was once director of corporate affairs. In some eyes such links, along with some warm comments a decade ago about public finance initiative (PFI) projects, are suggestive of an impure socialist faith.

But it is Smith’s response to those concerns that, perhaps, gets to the heart of why so many in the parliamentary Labour party believe that the fight to remove Corbyn from his post is, in fact, a fight over whether Labour is to be a social movement using parliament merely as a platform or a party seeking power through the Commons, and making compromises along the way.

“I’m not a Marxist,” said Smith, who now admits that PFI was a failure. “I’m someone who believes that we live in a capitalist society and that the Labour party is about trying to achieve socialism within that.

“Ameliorating the situation, not overthrowing it by revolution, is what we are about. It is the parliamentary route we have taken. And therefore we have got to understand that business is a vital part of our society.”

It is not yet clear whether Owen Smith or Angela Eagle will be on the leadership ballot sheet alongside Jeremy Corbyn. Photograph: Jack Taylor/Getty Images

Whether Smith or Eagle are to be on the ballot sheet alongside Corbyn is not yet at all clear, but a majority of MPs are clear it must only be one of them. A hustings for the benefit of MPs will take place in a room at the Commons at 1pm on Monday, and MPs will be able to nominate up until 5pm on Wednesday.

Perhaps more importantly, there is a scramble now to sign people up to pay £25 during a 48-hour window starting on Monday to become registered supporters and have a say in the coming leadership contest.

A mysterious group called Saving Labour, which declines to comment on its leadership or funding – allegedly for fear of being abused– is organising over a hundred street stalls, paying for content on Facebook and even mounting an advertising campaign in the pages of the Guardian and the Observer in order to collect voters who will oppose Corbyn. The author JK Rowling has tweeted in support to her seven-milllion-plus followers. Friendly constituency party chairmen are being encouraged to call up lapsed members or the two million people who agree to have Labour billboards in their front gardens at elections and ask them to rally to the cause.

On the other side Momentum, with help from the Unite and the TSSA transport union, is planning rallies and its own street stalls and has organised a series of “emergency phone banks” to accumulate backers for its candidate.

This might be the rebirth of Labour, in one way or another, or quite possibly the beginning of the end. Smith, a self-styled ideological follower of Nye Bevan, the postwar Labour health secretary and founder of the NHS, admits to fears about what may come. “We have never been more relevant as we teeter on the brink of another recession, as we have gone through six years of Tories and a decade of declining wages, greater job insecurity and no social democratic response to globalisation,” he said. “We have never been more relevant and we have never been further from government...But Bevan for me was right. It is the Labour party or it is nothing.”