On the island of Corfu in August four men met, each of whom may be capable of destroying one or more of the other three, but none of whom can do so without destroying himself. It should follow that from all of them a period of calm is now called for. But don't count on it. The male of the species is a strange beast.

How stale, how squalid, how vulgar, the past few days' supposed revelations about the rich sniffing the bottoms of the even richer on a Greek island in the summer of 2008 are already beginning to look. Yesterday's dismal economic news only makes the Corfu story jar more horribly. Tales of spivs and greed and silly money had a sort of gaiety during the fat years. Now a nasty undertone begins to surface.

Today we know for sure that Britain is heading into a recession. At the start of the week our heads were full of dates and places on a Greek island, where a Russian tycoon whose name we may have forgotten by the end of the month met a top Tory, whose career may either be sunk by this story or sail largely unscathed beyond it, as the facts, our interest and our memories begin to blur.

If there is no more to the Corfu affair than we've learnt so far, it deserves to be quietly buried after the administration of the last rites by tomorrow's Sunday press. The gravity of our economic situation should shame us out of any further maps of Corfu, dates of drinks receptions, and lists of the canapés.

For canapés are all we've had so far. I scan the media in vain for the beef. The plot is thin and the cast tawdry. A Russian oligarch, heading to be a minigarch as the world's economy nosedives. The scion of a once-dignified baronial dynasty, whose sad, drunken, rich-kid history is now being trawled through the popular press, caught in what looks like financial pimping for two Tories and a troubled aluminium trader. Four meetings with a billionaire over a sum approaching the cost of his cufflinks.

This isn't even Ian Fleming territory; this is EastEnders and OK! magazine. Before David Cameron allows himself to get too scathing, however, he should consider his own small misjudgment this summer. He was right to take a trip to visit Rupert Murdoch in Greece, and wrong to let others pay for it.

As to wrongdoing on Corfu, does any of this add up to a row of beans? Not yet. Lord Mandelson may keep what company he chooses so long as he is prepared to be open about it. It would be in the concealment of friendships that the danger could lie. George Osborne can frolic on any yacht he likes so long as he is open about it; and he seems to have been.

And I don't buy the current wisdom that in the donations row somebody must be lying, though both sides have persuaded themselves of this. Subtly different recollections of what in fact are the same core truths can lead to a bitter clash of recollections.

So it's worth looking at what that core may be and focus on it. Labour is happy for the whole thing to collapse into an unfocused mush from which all that emanates is a nasty smell of money-grubbing Tories. It may have its own reasons for preferring to let the details of who stayed where and who knew whom sink from attention. There may be a Labour story here too.

But isn't the Tory story this? Two top Tories got the smell of some possible Russian money for party funds and followed it up. Who actually proposed what, to whom and when, and in whose presence, nobody now remembers with any great accuracy, but it's likely that some attention was given to the possibility that the rich Russian's British subsidiary, rather than he himself, might prove a legal way around the ban on foreign donations. All parties have been exploiting legal ways around the law on donations ever since the 2000 Act came into force. “Channelling” of foreign gifts is unlawful but it will always be hard to establish (or even decide) whether the foreign boss's wish that his subsidiary contribute amounts to channelling.

The use of precise-sounding terms such as “channel”, “offer” or “solicit” should not obscure their essential malleability. Mr Osborne will genuinely believe that his interest in a donation did not amount to soliciting. Nathaniel Rothschild was probably only trying to help, believing a relationship would be good both for his associate, Oleg Deripaska, and his friend George Osborne. Mr Deripaska will feel that indicating a willingness to discuss a donation does not amount to offering one. And nobody will quite remember or agree who was really pushing the possible deal.

Maybe nobody. Maybe all of them. Probably something in between. The outcome - that no deal was done - may reflect the fact that nobody on reflection really wanted one. No wonder they all insist that they weren't initiating it. We can all

think of sexual situations in which either side becomes honestly indignant when accused of solicitation.

What are the consequences so far? Mr Rothschild is badly damaged, coming as he does from a family who combine wealth with dignity. If he persists in his vendetta, great harm will be done to that elusive thing, family reputation. Should he wish to, however, it's hard to imagine that when two men have known each other for so long, especially when young, there will not be more either can do to embarrass the other.

Mr Osborne's reputation for careful judgment has taken a direct hit but the damage is reparable by time. Should he try to repair it by questioning Mr Rothschild's honesty he will invite retaliation. Mr Deripaska has been made famous and he'll hate that. He may feel tempted to settle scores. Yet further prominence will hurt him more.

And in the background stands Peter Mandelson. This is the other story, the Labour story. Some say he was actually staying on the yacht, and I've yet to hear him deny it. He has allowed the impression to be given that his acquaintance with Mr Deripaska is relatively recent, and slight. Others suggest otherwise.

It will be Lord Mandelson's instinct to keep stirring - as he believes Mr Osborne stirred. If so, the Corfu story will not die this weekend, for the media will not treat it as an exclusively Tory story. Lord Mandelson will need to be very sure that he and his sponsor in 10 Downing Street can match the ingenuity and stamina that parts of Fleet Street will display as they begin to comb. A letter to this morning's Times (habit among ministers to move a story forward, which is greatly to be encouraged) appears to confirm that Lord Mandelson is now engaged in a defensive retreat on certain key details.

Russian money, power and influence is a murky business. You may have heard the last of Corfu as you return on Monday to life in recession-hit Britain. Or you may not. This could prove a long and wounding conflict.

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