Upsets don’t come much bigger than Jeremy Corbyn winning the Labour party leadership, so it’s unsurprising that Sadiq Khan’s triumph over Tessa Jowell to be the party's candidate for London mayor has been overlooked. Londoners won’t go to the polls until next May, but the ballot will be a defining moment for the Corbyn project in opposition, and the first significant bellwether of the likelihood of a Labour government, of some kind, four years later.

Khan’s most likely opponent from the Conservative Party will be the MP for Richmond Park, Zac Goldsmith. The two men could not have had more different upbringings: Khan’s father was a bus driver from Pakistan, Goldsmith’s a financier whose ancestors include a consul to the Grand Duke of Tuscany; Khan’s mother was a seamstress, Goldsmith’s an Anglo-Irish aristocrat descended from the Londonderry family. Khan, one of eight children, spent his early years in a council flat in south-west London; Goldsmith went to Eton before travelling the world as a dilettante environmentalist.

The differences in their biographies readily correspond to London’s growing economic divide, but the context of the Corbyn leadership there is a more important story. Khan, though on the left of the Parliamentary Labour Party, is a social democrat with far more faith in markets than such London MPs and shadow cabinet members as Corbyn, John McDonnell or Diane Abbott. Consigliere to Ed Miliband during his time as leader, he represents a large section of the party that is vocally critical of the Blair years yet unable to articulate a different way of doing politics. They could see that the crisis of 2008 brought an end to ‘third way’ social democracy, whose investment in the public sector hinged on its financialisation. And yet for seven years, five of them in opposition, they offered no alternative.

Over the course of the leadership race it was often remarked that both the Parliamentary Labour Party and the membership could be divided into two groups. On one hand were the ‘Jacorbyns’: trade union activists, younger members and those on the left who remember the glories of Bennism in its first flowering. On the other hand were the ‘modernisers’: the Blairites who, in the context of flat-lining pay and changing attitudes to such issues as utilities nationalisation, have moved into both public obscurity and, with Liz Kendall’s shambolic campaign, electoral inconsequence within the party.

There is a third pillar of the party, however, which grasps the inadequacy of Blairism in the context of austerity, yet remains unswayed by radicalism: they favour unions, and might even defend their role in fighting income inequality, but will rarely, if ever, be seen on picket lines; they may have read Marx, but probably only the Communist Manifesto, which they are likely to dismiss as naive and utopian.

Khan is typical of this third group – along with Andy Burnham and Luciana Berger – and it is members and MPs like him who will decide whether Labour stays together. If they side en masse with Corbyn, and an economic programme outlined by Britain’s first Marxist shadow chancellor, then Labour stands every chance of success in 2020. But if they get cold feet and side with the likes of Tristram Hunt and Rachel Reeves, Labour might have a new front bench in twelve months time.

For now, the former seems far more likely. Khan has overtaken Goldsmith as the favourite and if he takes City Hall next year – on a platform well to the left of anything touted by Burnham, Kendall or Yvette Cooper – it would strengthen Corbyn immeasurably. Khan is far from perfect – he has accepted significant donations from property developers, for example – but his rhetoric has been increasingly shaped by the events of the summer, and he’d have had little chance of beating Jowell without the support of people who signed up to vote for Corbyn.

A split in the Labour Party looks inevitable in the coming years. Which way Khan and those like him choose to go will be decisive. If they shift left, it will make the current realignment far from temporary, ensuring a permanent re-engineering of Labour, and with it British party politics. The founding moment for that could be next May’s election. Khan as mayor could be the anchor that gives Corbynism institutional as well as popular power.