Matthew Norman: While Brown sinks, Mandelson rides the crest of a wave

The First Secretary of State is teasing us about his indestructibility

Mamma Mia, there he goes again. A year after paying personal homage to the Abba movie with a Greek island idyll of his own, Peter Mandelson is back on Corfu. It's classic Mandy. No other frontline politician would revisit the scene of an episode that threatened to destroy him. Who else has the Olympian chutzpah, during a brutal recession, to remind us of superyachts and oligarchs, and dark insinuations of dodgy dealings over the Beluga and Kristal?

When the story broke, initially it seemed the fighter would have to quit for good. He had received his second, and final, public warning a decade ago on being resigned over his involvement with plutocrats (the Hindujas), and, as grapple fans will recall, a third of those means permanent disqualification.

And then, with a little help from his friend Nat Rothschild – his host again this week – he slipped George Osborne's Boston Crab, flipped the Shadow Chancellor over his shoulder, gently placed a knee to his throat and had the Bullingdon Brawler squealing in submission. Perhaps, on reflection, this is why Lord M has gone back to Corfu: to remind his party how nimbly he turned the tables on the Tories when he was the rank underdog, the creature to which he now routinely compares Labour.

No one better understands the power of subliminal political messaging. Maybe also he's coquettishly teasing us about his own indestructibility. He knows he could be filmed live emerging from the Bank of England vaults with treasury notes stuffed into a bag marked "SWAG", and a grinning TV audience would appreciatively murmur, "That Mandy, eh? What a character the old rogue is". And he wants us to know that he knows.

Whether he means to use his colossal strength to oust Gordon Brown in October, the likely time of maximum danger for the PM and last possible moment for a pre-election putsch, or wait until after the election to challenge for the leadership, remains opaque. But the clues are all there. In recent days we've seen Jack Straw change the law to enable life peers to switch to the Commons without fuss; a brace of Sunday paper reports about his leadership intentions; former chief whip Hilary Armstrong, who has an ultra-safe seat in the North East to bequeath, supporting him; Harriet Harman giving that American cliché "dream ticket" an airing by also talking him up; and William Rees-Mogg (not always a soothsayer who speaks the utmost sooth, but a commentator of heft all the same) treating the notion of Premier Mandelson seriously.

In the absence of violent reaction to this speculation are contained two extraordinary things. The first is that the notion of PM as PM creates very little visceral horror within the party, media (with one or two exceptions) and public. Even by the standards of Bob Monkhouse Syndrome by Proxy, whereby the most reviled national characters inevitably come into vogue if they hang around long enough, this is some transformation.

The second, of course, is that an openly gay prime minister now appears acceptable to the country. Remembering his fierce fight to remain in the closet, there's a weeny irony in this one. But, in making the shattering of the last great glass ceiling imaginable, he may already have done more to promote equality than the gay campaigners who once sought to out him.

On his ambitions, the First Secretary of State, etc, etc, is unusually reticent. Yesterday I tried to tease a statement from this gifted hoofer before he treats Corfu's most exclusive nightclub to his "Dancing Queen". He sidestepped the question, emailing only that he will spend his hols doing community work in a local orphanage.

If this new mastery of self-parody is a valuable tactical weapon in seducing the public, others in the arsenal are more destructive. He could, to cite just one, remove Gordon Brown by deploying a nuclear resignation. Not his own, of course, because the Heseltinian doctrine about crowns and assassins holds good. But he has all the codes, and having persuaded David Miliband not to quit in May, he could easily unpersuade him in October. Assuming the polls remain hideous, and that a wretched party conference provokes a fresh eruption of despair, the hapless Foreign Secretary might leave the Cabinet "in the interests of the party". The tears welling up, Mandelson would tell Gordon that he can do no more to save him, and he'd be gone within hours. Ms Armstrong, one of the Blairite cabal of whom Mandy is undisputed leader, could then give up her seat. His lordship could renounce his lordship, be back in the Commons within the month, and Prime Minister by Christmas.

If fretful ministers and backbenchers do finally conclude they'd rather not go down meekly with the ship, he has only one serious rival. But Alan Johnson, charming Minder extra though he is, lacks the ruthlessness and gumption, as, to the nth degree, does David Miliband. James Purnell is too weedy and callow, Straw too bland and sneaky, Harman too overtly power-hungry and, as her nonsense this week confirms, politically dim. As prospective Prime Ministers go, this lot are less than pygmies. They're Munchkins.

Mandelson, meanwhile, has mutated from Wicked Witch of the West into Good Witch Glinda, and with the party marooned in a scarily alien electoral world, a friend of Dorothy is required to safeguard those ruby slippers and ensure that New Labour finds its way home.

Like that Kansan tornado, the man is a force of nature. He cannot be diverted, let alone stopped. Much the biggest box-office draw in British politics, he has developed what Francis Urquhart – surely his prime ministerial template – called bottom. Wherever I go these days, be it pub, back of a cab or steam room at the Turkish baths, those who not long ago would rail about him in the least elegant of language now nod sagely and say that he is the only minister they trust on the economy, in much the way they talk of Kenneth Clarke and Vince Cable.

That he wants the job is in little doubt. Apart from the happy confluence of those Sunday newspaper stories, Ms Harman's backing, Ms Armstrong's handy hint and Mr Straw's constitutional amendment, a few weeks ago Mandelson told a parliamentary gallery lunch that there is no chance of Britain joining the euro for untold years. There could be no more blatant a piece of strategic repositioning, designed to neutralise the weakness that is his Europhilia, than that. Smoothly and surely, he is laying the ground to strike in October should Gordon's grip further weaken. If he waits until next summer, the resistance of the trade union portion of the electoral college might well be fatal. But so close to an election, and regardless of the most recent precedent, a swift coronation makes far more sense than weeks of internecine poison.

I am not saying that this will happen, or even that it is likely, merely that it is possible. Peter Mandelson could, if the cards fall right, be our Prime Minister before the year is out. If the Labour movement has an ounce of survivalist sense left, he will be. He is its best, and probably only, hope of averting the cataclysm. After all, as the song almost goes, how can we resist him?