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A Delicate Truth, By John le Carré

Welcome back our peerless spymaster, with another novel that unmasks low deeds in high places

When the Berlin Wall came down in 1989, John le Carré was left without a clear subject. The USSR had evaporated, and with it the Cold War antagonisms that informed his spy fiction.

Nevertheless, le Carré kept a hawk's eye on the former Soviet bloc's new breed of capitalist oligarch, as they became puffed up with more privilege than yesterday's apparatchik. His previous novel, Our Kind of Traitor, explored corruption within the City of London and the money pumped into it from Putin's Moscow.

A Delicate Truth, le Carré's 23rd novel, is another fable of conspiracy and financial malpractice. In the British Crown Colony of Gibraltar, a counter-terrorist operation is underway to capture a high-ranking jihadist arms-buyer (who may or may not be in league with al-Qa'eda). The year is 2008. Private arms contractors have infiltrated New Labour, while millionaire silks like Lord Falconer (who advised Tony Blair on, among other things, the "lawfulness" of the Iraq War) continue to pontificate on the differences between "law and justice". Everywhere, ministers are mixing private business with official duties.

Kit Probyn, an old-school Foreign Office servant, is despatched to Gibraltar to report on the outcome of the operation. The operation is so hush-hush that even Probyn is kept out of the loop; only later does he learn how it has gone disastrously wrong and left innocent "blood all over the Rock". Should he turn whistle-blower and tell the truth, or keep silent? A cast of international fraudsters, currency speculators and "Brother Blair" socialites serves to darken the atmosphere of conspiracy.

Chief among the dishonourable Blairites is Fergus Quinn, a Ministry of Defence mandarin with interests in the rich pickings of the armaments industry. Within his circle are rogue CIA intelligence pedlars, far-right American evangelists and a creepy House of Lords lobbyist called Jay Crispin, "a rather obviously pretty man of no depth". Corruption is no respecter of ideology; Labour Party members conspire with Conservatives to see what can be got for nothing.

Quinn's private secretary, Tony Bell, is nonetheless prepared to go public with the truth about Gibraltar. Like the alienated M15 agent Alec Leamas in le Carré's The Spy Who Came in From the Cold, Bell is a loner bent on talking truth to power. The Iraq war, in his view, had been "illegal, immoral and doomed": yet he is duty bound to sing the war's praises. He is a man driven to distraction by the lies he has tell.

In his trademark lucid prose, le Carré tells how a good man like Bell is sucked into the dishonesties attendant on matters of "Deep State", where non-governmental insiders from banking, industry and commerce are made privy to classified information denied to huge sectors of Whitehall and Westminster. Le Carré has always liked to dilate on the threadbareness of post-imperial Britain and the mirage of the country's importance on the world stage; Gibraltar, a "vanishing protectorate", is portrayed as a haven for arms dealers and casino complexes. Britain may be stony-broke but expatriates are making a mint offshore.

Le Carré, now an august 81, is a writer of towering gifts, whose fiction appeals to a reading public both popular and serious. A fiction without a story – le Carré knows – is scarcely worth its weight in paper. Throughout A Delicate Truth, the tension ratchets up superbly as revelation follows on revelation. Much of what passes these days for literary fiction is mere creative writing; le Carré is one of the great analysts of the contemporary scene, who has a talent to provoke as well as unsettle.

Ian Thomson's biography of Primo Levi is published by Vintage

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