Discussing with me what might be done to stop Colonel Gaddafi from slaughtering his people, a minister sighed: "It is all very difficult." So it is. How will it be done? Who will do it? On what authority? None of the diplomatic and military questions swirling around this crisis resolve into easy answers. But behind them all looms one big, inescapable and very stark question: are we prepared to let the colonel prevail? Here is the bottom line: will the west sit on its hands as Gaddafi attempts to extend his tyranny into a fifth decade by massacring those who have risen up for freedom?

When Libya first erupted against its dictator, Barack Obama, David Cameron and the rest of the soi-disant leaders of the free world appeared to enjoy the good fortune of avoiding that choice. It looked as though the Libyan people were on the brink of disposing of their tyrant without the need for outside assistance. Town after town fell to the rebels. Significant elements of the armed forces peeled away. Airforce pilots chose to ditch their planes or fly them to Malta rather than follow the tottering regime's orders to bomb the uprising. Western governments that had previously canoodled with the colonel were emboldened to announce freezes of the regime's assets. Gaddafi seemed bound to join Ben Ali of Tunisia and Hosni Mubarak of Egypt at Duntorturin' or some other retirement home for deposed despots. Or he would be caught and tried for his crimes against humanity. Or he would be dead. David Cameron told MPs that it was "unthinkable" that the colonel-tyrant could remain in power.

Well, now the prime minister and his international peer group are having to think the unthinkable. Gaddafi has launched a ferocious counter-offensive and it is making rapid progress against the forces of freedom. Without external intervention, this is a battle he is very likely to win when it is an unfair fight between rebels with rifles and a dictator armed with mercenaries, tanks and warplanes. In the words of one senior figure at No 10: "We are in a race against time." The choice that the west didn't want to have to confront is upon us. Some still don't want to face it. The Nato summit last Thursday broke up with planning of military options under way but no agreement on their implementation. The meeting of the European Council on Friday was palpably divided. Rather a lot of the British political class has indulged itself in essentially parochial wittering. We have all had good sport at the expense of the pratfalls of the Foreign Office. We have had more fun hooting about the Special Forces team which surrendered to a crack squad of Libyan farmers. We have debated ad nauseam whether Prince Andrew is a fool or an idiot. Westminster has buzzed with gossip about who last saw William Hague's misplaced "mojo" and which of his cabinet colleagues might be scheming for his job. The antics of the Queen's second son and cod-Freudian analysis of the foreign secretary's political libido are interesting in their way, but this is displacement activity, another way of deflecting the question: so what are we going to do?

The Obama administration, without whom no meaningful intervention is feasible, is divided and emitting conflicting signals. Nicolas Sarkozy has tried to cover his country's corrupt embrace of dictatorships in the past with the present flamboyance of giving unilateral official recognition to the rebels' transitional council. The Germans have been relatively consistent; consistent in their unwillingness to contemplate doing anything substantial to prevent Gaddafi from butchering his own people.

Some of these dilations are a legacy of the Iraq war. Eight years on from the invasion, the calamitous errors after the toppling of Saddam continue to poison the cause of liberal interventionism. The shadow of Iraq makes it harder to win the argument that both self-interest and our moral values demand a response when a dictator is brutalising his people on our doorstep. In fear of another Iraq, the west risks repeating a different, earlier mistake: the divided and impotent European response to the slaughter in the Balkans in the 1990s.

One western leader has clearly been changed by this crisis. His name is David Cameron. In opposition, his most memorable phrase about the world was to declare: "We cannot drop democracy from 10,000 feet and we shouldn't try." As a device to distance himself from Iraq and the messianic tendencies of Tony Blair, that was a neat soundbite. As a guide to what David Cameron would do in office when confronted with a crisis it has proved to be a useless compass. Cabinet colleagues and senior advisers have witnessed a rapid evolution in the prime minister. There have been surface oscillations in his responses to the tumult in north Africa and the Middle East, but his overall direction of travel is clear. He led with his chin a fortnight ago when he first suggested that the west needed to be planning for the worst and preparing interventionist options such as imposing a no-fly zone. Mocked then as a blowhard floating a notion for which there were no allies, David Cameron now looks prescient in his anticipation that the west needed to prepare for the prospect that the colonel would fight back. This transformation of David Cameron into the most hawkish voice in Europe was visible at the end of the Brussels summit where frustration with its failure to agree on a robust policy could be seen steaming out of the prime minister's ears. There is a spectrum of opinion within the cabinet, but my sense is that he can now carry his colleagues behind British participation in some form of military intervention to check the colonel.

Another important development is in the position of the Lib Dem ministers. Some of their number are very queasy about the prospect of intervening in Libya, but the senior ones are taking an increasingly muscular position. Nick Clegg has been in careful in recent days to draw a distinction between the Iraq war, which his party so passionately opposed, and Libya. Labour, too, will have to make up its mind about where it stands when liberty contends with tyranny.

David Cameron has an ally in the French, the only other power in Europe with some serious capability to act. "We cannot stand idly by and watch civilians being massacred," said an exasperated Sarkozy after the European council. But the hawkishness of Mr Cameron and his French brother-in-arms will be rather beside the point if they cannot find allies. "We can't do this on our own," accurately observes a senior adviser to the prime minister. The search for support among Arab states, in Europe and at the United Nations goes on. As ever, the crucial actor is the United States. America is torn, as so often throughout its history. The conviction that it has a mission to support freedom contends with its fear of foreign entanglements, an aversion to intervention made the more intense by its recent experience in the quagmires of Iraq and Afghanistan.

There are significant voices in his administration counselling Barack Obama to stay out of Libya. They could well win the argument. In some ways it would be surprising if they do not. There are serious issues about how intervention could be made effective. There are understandable nerves in the US about the risk of becoming sucked into a ground war in north Africa. There is an explicable reluctance among Americans to take up a burden from which much of Europe flinches, even though this crisis is in Europe's backyard. It might not be a noble course to stand idly by while civilians are massacred, but doing nothing can always be made to sound like the safer option. Action will have consequences.

So, though, will inaction. If the west chooses to be inert, the first casualty will be the people of Libya. Gaddafi will wreak a terrible vengeance on those who rose up against him. He will make good on his chilling threat to "cleanse Libya house by house". Libya will be an embittered, pariah regime with a grudge against its neighbours and the rest of the world. A defeat for freedom there will radiate out into the rest of north Africa and the Middle East and beyond. There are a lot of rightly nervous dictators in the world at the moment: tyrants who fear copycat democratic revolutions. These dictators have a trilemma: do they reform, do they quit or do they attempt to crush their people's aspirations for freedom? If Gaddafi prevails, his fellow dictators will have a template for what they should do when faced with revolt: kill the opposition without mercy in the confidence that the preachers of democracy in the west will do nothing more than wring their pathetic hands.

Are we content to let Colonel Gaddafi win? This is the question that neither western countries nor their leaders have wanted to confront. This is the question that now stares us hard in the face.