Fourth Plinth project is a fine idea, but this work is very unmonumental

Under a greying midday sky, at a signal from Ken Livingstone, London's Mayor, the crane began to hoist, the tarpaulin rose, and – after a bit of snagging on corners – something was revealed that resembled, at first sight, a large constructional toy.

Thomas Schütte's Model for a Hotel is the fifth temporary contemporary sculpture to occupy the empty plinth in the north-west corner of Trafalgar Square. Made of stacked horizontal layers of coloured glass, fanning out in red, yellow and blue, it is a very light-sensitive work, and the day was doing it no favours.

The project has had mixed results since it began in 1999. The previous tenant, Marc Quinn's Alison Lapper Pregnant, held a valuable sermon on the dignity of the disabled but was a terrible piece of statuary. It's good that it has gone. The one before that, Rachel Whiteread's inverted resin cast of the plinth itself, was formidably literal-minded. And before that, Bill Woodrow's jumble of allegorical objects is best forgotten. Only the very first one, Mark Wallinger's Ecce Homo – a life-size figure of Jesus, standing looking quite lost in the modern public realm – achieved real presence.

But it should be said that the Fourth Plinth project is itself a good thing. What other chance have we of getting decent sculpture into the heart of London? The historic works in the area are far from glorious. Edwin Lutyens' Cenotaph is the only admirable example for miles. The more recent additions have been abominable. The Oscar Wilde monument at Charing Cross is an atrocity. The Women's War Memorial in Whitehall is breathtaking in its incompetence. The new statue of Lawrence Olivier on the South Bank is pitiful and startlingly repulsive. And these works, remember, are permanent. Nothing short of a nuclear attack will remove them.

So the Fourth Plinth project is a fine idea – more than that, as a public enterprise, it is almost miraculously sensible. Here was a monumental plinth that had been designed in the middle of the 19th century to support an equestrian statue which never materialised, and had remained unoccupied ever since. Well, then: commission a succession of contemporary work to sit on it.

It makes inventive use of an existing vacant outdoor space. It gets contemporary art into visibility. And through regular changeovers, it allows a variety of work to be seen. Calls for the plinth to hold a permanent statue of Diana, Princess of Wales, or Nelson Mandela have fortunately been resisted. A new shortlist will soon be announced. And would that most of the recent street sculptures were subject to the same time limitations.

The only intrinsic problem with the Fourth Plinth is that it presents an artist with too overt a challenge. How tempting to do something that is about the plinth itself, or about the tradition of monumental civic sculpture. None of the artists so far have resisted the temptation. All have done variations – better or worse – on those themes.

Thomas Schütte might well have done another one. Born in 1954, the German artist has made a lot of work that plays with scale and the idea of the monument. He's made gigantic figures and miniature figures. He's made small models of huge buildings. He's made the plinth into a conspicuous element of his sculpture. In one memorable piece, a trio of tiny figures was placed high on a great three-tiered plinth – not so much elevated as stranded up there, and holding out for rescue. He seemed almost too obvious an artist for this project.

But Model for a Hotel is a surprise, and a nice one. In a way it is a representational piece, a diagrammatic scale model of a 21-storey hotel, and its title appears prominently on a sign in front of it, to insist on this aspect. In another way it is a purely abstract sculpture, recalling high modernist work from between the wars. It looks like nothing in particular. It doesn't mean anything. It isn't telling us anything.

Compared to most of the Fourth Plinth sculptures, it is very unmonumental. Nor does it make any kind of self-conscious fuss about being on this historic plinth. But from every side it looks different, surprisingly different. And given there are so many gaps in it, and how susceptible it is to changing effects of light, it's quite easy for it to half disappear.

At least, that's how it often was at the time of the unveiling: a light, discreet, hovering presence, sitting up alertly on its big stone chair. But at other times, presumably, it will gather light into itself and glow – and at others become a solidly reflective block of colour. It will be around for the next 18 months or so. I can almost imagine wanting it to stay longer.

Previous occupants

Mark Wallinger: Ecce Homo (1999)

A life-sized Christ figure took the first stint on the plinth. Naked but for a loin cloth and a barbed wire crown, the sculpture was very popular. It was the turning point in Wallinger's career: within a year he was selected to represent the country at the Venice Biennale.

Bill Woodrow: Regardless of History (2000)

This project was a comment on the passing of civilisations. The bronze sculpture of a severed head appeared pinned down by a giant "book of knowledge" and the rootsof a gnarled tree.

Rachel Whiteread: Monument (2001)

Whiteread's upended mirror image of the plinth itself was typical of her playful postmodernism. The clear resin structure was largely well-received by the critics.

Mark Quinn: Alison Lapper Pregnant (2005)

The naked figure of pregnant phocomelia sufferer Alison Lapper was more than three metres tall, and spared no detail in depicting the deformity of her limbs.