But it is more than all these things, for there is also an element of being cross-grained to the point where it hurts even oneself. The classic Fife definition tells of a mother who gives castor oil to her two wee boys, who are constipated. The first absolutely refuses to take it; that is stubborn. The other swallows the dose, then glowers at his mother and says: "Aye – but I'll no' shite!" That, non-Fifers, is thrawn.

Gordon Brown is famously a Fifer. That means he has the other Fife qualities (or defects, as my wife will tell you): stiff-necked pride and a dogged determination never to be seen as a quitter.

The Gordon Brown I know will not buckle and give in to the panic-merchants inside and outside his Cabinet who are calling for him to shoulder the blame for the catastrophic Crewe by-election and quit. Those behind the murmuring campaign do not know their leader – and they do not know what is good for the Labour Party.

Thrawn-ness will ensure that the more the mutterers and mutineers moan about him, the more determined Brown will be to prove them wrong. Pride in his past record convinces him he is the right man "to steer the British economy through what have been very difficult times in every country of the world". And the horror of being seen as a quitter will not allow him to become the second shortest-serving PM in history after Canning in 1827, who served 119 days then died.

Besides, there is no appetite in the Labour Party for a divisive contest, no possibility of getting 70 MPs to call for one, and no credible contender. The situation remains exactly as it was when Brown became unelected leader last year: any fight would be a lightweight against a heavyweight, no one wants to challenge him and, in any case, no one in his (or her) right mind wants the job in the current circumstances. Even though three-quarters of the Cabinet would be wiped out if an election were held now, the only names being mentioned are outsiders like Alan Milburn, a bitter Blairite, and Charles Clarke, a first-class brain who should be inside the Cabinet and not outside the tent piddling in.

Crewe has all the signs of a pivotal point in British politics. It may not be the end of the world for Labour, but they are on the road to it. It raises two questions: Can Gordon Brown turn it round? And how? The answer to the first: it's possible. Margaret Thatcher and John Major both won general elections after suffering a string of by-election defeats.

David Cameron was talking through his top hat when he claimed "thousands of people who have never voted Conservative before have put their trust in the Conservative Party". They did nothing of the sort; they loaned their votes to the Tories to send a message to Brown. The PM has two years to show he has got the message and will produce tangible answers to voters' concerns about food, petrol, gas and electricity bills and mortgages.

Labour made it easier for Cameron and Co with an inept and downright nasty campaign so that the Tories won without having to prove they have the front-bench personnel and the policies to make a credible government. Crewe showed they are a tactical protest vote in England, in the same way that the SNP are the protest vote in Scotland – and, as the Nats have shown, protest can lead to government.

How can Brown turn it round? As he has tacitly admitted, bunkering down in Downing Street and hoping for an economic upturn will not do it. Instead, look for a Cabinet shake-up, movement on fuel tax, more help for the hard-pressed and an avoidance of let-downs on totemic issues like post office closures, police pay and the 10p tax band.

Labour long ago identified the feeling that "they're on our side" as the prime factor in winning elections, yet on the 10p tax the Government blew that trust by hitting the very people Labour is supposed to protect. Small wonder that a siege mentality is setting in, with some MPs predicting the party is heading for disaster, while others openly talk about the electoral cycle running its course and it's now the Tories' turn. In a word – defeatism.

Cameron was right about one thing: Crewe is the end of New Labour. Even before the result, TUC general secretary Brendan Barber demanded "a complete reconfiguration of the DNA of New Labour" to get back to "the most enduring Labour values – equality, fairness and social justice". If Labour does not make that shift before the next election, we will see a radical realignment of politics – and possibly the UK. The SNP could be in power until 2015, with a Tory Government in London from 2010; a sure-fire recipe for UK upheaval.

The influential pressure group Compass says: "The problem with New Labour is not just that it is not Labour enough, but that it's not new enough either." A defeat for unreconstructed New Labour with PM Cameron posing as heir to Blair is sure to trigger a new left-of-centre grouping. Forget the irrelevance of the Lib Dems, if Labour does not change, the reaction from the fed-up, the disillusioned and the let-down will be to form a real social democratic force (and what a pity that title was nicked by the Gang of Four 27 years ago).

Gordon Brown should make the move first, because what he does in the next few months may decide not only his own political future, but also the survival of the Labour Party.