This is Duncan Smith's last stand – and only a miracle can save him

Given the level of public disillusion, there is every scope for a Tory revival, under the right leader. He exists: Oliver Letwin

Iain Duncan Smith has almost ceased to be the leader of the Conservative Party. Though a ridiculous appointment precipitated the crisis, the real explanation does not lie in sackings at Central Office, or disputes between modernisers and traditionalists, or in Michael Portillo. Even before the latest dégringolade, Mr Duncan Smith's position had been disintegrating. MPs and others who had spent 18 months fighting down their own doubts and talking him up were finding themselves unable to continue. The weight of evidence was forcing them to conclude that the best possible outcome of an IDS leadership would be electoral mediocrity.

The leader's erstwhile supporters were also influenced by the volume of testimony on the doorstep. Almost all the MPs and candidates I have spoken to over the past few months have said that they could not go 50 yards in the constituency without being asked when they were going to get rid of their leader. It was as if the British public had concluded that they could never imagine IDS in 10 Downing Street; that he was simply not up to it.

The public has a point. IDS's problem is not lack of intellectual ability. He is as bright as Attlee or Truman were, and they both played a significant innings. But they had two attributes that Iain Duncan Smith lacks. They were able to stamp their personalities on men and events. They also found no difficulty in employing formidable adjutants and advisors, without ever becoming slaves to the advice. IDS has proved incapable of doing likewise.

He had some of the right instincts. He knew that the party ought to say less about Europe and more about the public services. Yet he failed to define himself or to establish a political identity. It was all very well his talking about the determination of a quiet man: a good phrase. But the poor fellow did not seem to realise the folly of taking himself literally. This particular quiet man could only have succeeded by making a great deal of the right noise.

Politics rarely permits stasis. If you are not pressing forward and defining the political debate, you will be pushed backwards and compelled to accept your opponent's definitions. But IDS was even unable to brush aside the nonsense about modernisers and traditionalists. Some journalists had the bright idea of devising those labels, in order to encourage the recent Tory tendency to turn nuanced discussion into civil war – and the party fell for it.

That was absurd. Conservatism is like the English common law: an endless process of adapting old principles to new circumstances. No sane Tory should accept the bifurcation of modernity and tradition; that is like bifurcating common sense. Yet this is what now passes for Tory intellectual debate.

IDS must take much of the blame for this. Margaret Thatcher sought to present her party as an idea on the march. IDS has not. Instead, the pressure of adversity has sapped his confidence. That may explain the most disastrous of the recent decisions: the proposed appointment of Barry Legg, a former MP and old friend of IDS's, in the combined role of leader's chief of staff and party chief of staff. That would be a big job. Mr Legg is not a big man. The new role would require great political judgement. Very few Tory MPs have any respect for Mr Legg's judgement. He is not even widely liked or trusted.

A ludicrous overpromotion, it encouraged Tory MPs in the concept of overpromotion. If IDS thought highly of Mr Legg's judgement, why should anyone respect his? The leader of the party is entitled to pick his own team, but if he tries to turn Central Office into a comfort blanket, he must expect rebellion. Though Mr Duncan Smith was in near-terminal trouble before the Legg appointment, it was the catalyst that transformed despair into anger.

If the old Tory leadership system still existed, Mr Duncan Smith would be out before the middle of March. These days, however, a leadership election takes at least three months. If Tory MPs were to force a leadership election on the party and the country before the local elections on 1 May, there could be mutiny. Although some associations are furious about the dismissal of the able chief agent Stephen Gilbert, others are already talking about a campaign to deselect any MP who votes for an early leadership contest.

Assuming that this sensible and forceful opinion prevails, IDS has 10 weeks to save his leadership. If he is sensible he will screw his courage to the sticking point, reassert his confidence and be himself. That way, he will at least have the consolation of going down fighting with his wounds in front. That is now his last best hope.

Many Tories now believe that their party's position is hardly better than IDS's. Yet such near-suicidal pessimism may be premature. The Labour government ought to be in electoral trouble, for it is widely unpopular, and its leader's sincerity is widely questioned. On all the central domestic issues, Mr Blair's policies are failing, and no amount of spin will conceal that, especially among an electorate which has now become immune to spin. Voters are now ready to listen to the argument that it is time for a change. So given the level of public disillusion and the increasing volatility of British politics, there is every scope for a Tory revival, under the right leader.

He exists. Oliver Letwin, a former Cambridge philosophy don, has a powerful intellect and is equally well equipped with intellectual self-confidence. He is also transparently honest, and likeable; he gains in stature and popularity with every media appearance. Large sections of the British public may well be in the market now for a politician like Mr Letwin.

There is only one small problem. Mr Letwin insists that he does not want the job. He is also absolutely loyal to Mr Duncan Smith, and will spend every hour of the next few weeks fighting like seven devils on his behalf. If and when this fails – and it is now when, not if – prodigious efforts will be made to persuade Oliver Letwin that he has a duty to stand.

Much will hang on his decision. There are other candidates, but there is no one else who would be nearly as good as uniting the party – and at regaining the trust of the British people. If Mr Letwin is dutiful enough to stand and his party is wise enough to choose him, British politics could look very different in 12 months' time. At the moment, the Blairites can always find light relief from their travails by mocking the Tories' misfortunes. But they may be in for a shock and for a real challenge to their hegemony. At the very least, a Letwin leadership would it make much harder for Tony Blair to abolish the pound.

For the next few weeks, however, it is IDS's last stand. He is entitled to take this final opportunity to transform his prospects, and he only requires one thing to succeed. A miracle.