Analysis: The battle for Corby

Labour didn't waste any time this morning. Just hours after Louise Mensch announced she would step down as an MP, the party's prospective candidate for Corby and East Northamptonshire fired off a press release.

"Louise Mensch was obviously struggling to balance being an MP with her family and business commitments. I respect her for the honest way she talked about this and her decision to step down," Andy Sawford wrote. "Labour is now looking forward to the campaign ahead. During the by-election we will focus on the two wasted years of Tory policies that have taken the country back into recession and left Corby suffering job losses in both the public and private sector."

The opposition's eagerness reflects the value of the seat. Corby is a bell-weather constituency, with a mixed social composition, which could greatly strengthen Ed Miliband's claim to be on the road to Downing Street.

The former steel town of Corby is ringed by beautiful, picturesque villages, giving the seat a complicated political personality. The town itself slid into anti-social behaviour and crime during its period of industrial decline but a Midlands main line boosted regeneration.

The seat has always been a hard win. Even in the 80's Tory victories relied on 1,000 to 3,000 votes. Eventually that Tory lead slimmed to the tiniest of margins, allowing Phil Hope to win it for Labour in 1997 with a massive 22% majority. The governing party was lucky to keep the seat in 2005, when its majority was cut down to just 1,517. Rising affluence drove some voters towards the Tories, even in the industrial hub of the constituency, but the erosion of the Labour vote was also the result of Tony Blair's deteriorating popularity.

By 2010, Mensch was able to take the seat off Hope, although even then – with Labour's popularity at rock bottom under Gordon Brown – she was unable to win the type of landslide New Labour secured in 1997. Her majority is just 1,951 votes, or 3.6%. It is easily overturnable.

The bell-weather nature of the seat makes it political dynamite and it also ensures the by-election will be nastily fought. Having already been weakened by a disastrous Budget, a double-dip recession and mass rebellions by his backbenchers, Cameron cannot afford to see signal seats like this turn red. If the Tories lose expect all that Olympic chatter about Boris Johnson's leadership ambitions to reach deafening levels.

Miliband will be desperate for a win. This is precisely the sort of seat he should be in a position to take, given the coalition's disarray, the bite of austerity and his own soaring opinion poll ratings. It will also prove he can appeal to Labour's working class base as well as liberal middle class intellectuals seduced by his 'predator capitalism' message. Failure to clinch the deal would bring back those whispers about his leadership.

Whoever loses will feel the glare of the media spotlight on them from the November date of the by-election right through to Christmas.