Howard Jacobson's unrelievedly pessimistic novel opens with a conversation in which a tarantula bets a wolf that he can outhunt him.

Taking up the challenge, the wolf kills all the prey in the forest, and returns triumphant. "So what are you going to do for sustenance now?" asks the tarantula. Taken aback, the wolf realises he will have to eat his wife, his children and eventually himself. The moral, writes Jacobson, "Always leave a little on your plate."

The point of this grisly prelude grows increasingly and repellently obvious as J unfolds. No prizes for guessing to what J refers, although the word Jewish or Jew never touches the page. The main character, Kevern, still puts two fingers to his lips whenever he says a word that begins with a j, taught to do so by his father, and we are to believe that J is toxic, jinxed. Although it is never spoken, the society in which he lives is indelibly tainted and warped by events that have wiped out the word, and the people it applied to. Or most of them.

Those turning to Jacobson's latest work in expectation of the sardonic wit and introspective wise-cracking they have grown to enjoy will be disappointed. What little humour it contains is bitter and black. Instead of the social and situational comedies Jacobson is known for, J is more like a manifesto, a bleak prediction of what the distant future might hold for Jewish people in a post-holocaust, post-Israel age.

Set a few generations from now, in an unspecified country not unlike England, J opens by depicting Kevern fearful that he is under surveillance, though why this should be so and what he worries the authorities might find is not at first clear. Gradually we are introduced to the idea that history has been wiped clean: reading and anything but the "benign arts" are not encouraged, and certain books are simply unavailable. Public records have been destroyed and people are actively discouraged from enquiring into the past. Nobody dare ask about WHAT HAPPENED IF IT HAPPENED, or events such as Twitternacht. Memories of a time when ice cream vans jingled their way round the country, bearing slogans telling certain people they'd better leave, are best left dormant. Thereafter, to aid amnesia, there was an obligatory renaming of everybody. Gone was anything euphonious, it seems, leaving only names as hard on the tongue as broken glass.

The scene is miserable and threatening, not just because of the loss of history and truth. People now behave roughly, men biting and hitting their womenfolk (and vice versa), and everybody fractious and aggressive. With something less than relish, but a certain ghoulish fascination, Jacobson peoples his novel with characters full of menace. There is a disorientating sense of vertigo about his backdrop, but his central characters feel familiar, marked by the author's customary sensitivity, prickliness and suspicion.

Kevern, who embodies all three qualities, is a woodcarver who lives alone by the cliff tops. He has no family, whereas almost everyone else "was as an arm, joined to one gigantic octopus". Unloved, he also has no-one to love. Then one day he meets the exquisite and feisty Ailinn, a twentysomething orphan whom he recognises as a soul mate. What follows is the only warming, potentially uplifting element in an otherwise brittle and unsettling tale. Yet none but a naive reader could overlook the portent held by Ailinn's shadowy, painful past. Slowly, inevitably, events of the past catch up with this pair, and they learn more about who they are and where they come from. Meanwhile, those in positions of power dance around them like wolves beyond a camp fire, eyes bright, fangs bared.

J is like nothing Jacobson has written before. Told from various perspectives, including official reports, old letters and the ruminations of those paid to spy on neighbours, this is a highly complex, over-complicated but undeniably powerful work of speculative fiction. Into it Jacobson has poured his deepest fears, resentment, anger and anguish dripfeeding his novel with a long-bottled poison that, while expressed in the form of dystopian fiction, nevertheless feels uncomfortably plausible.

As one individual reflects on the people who were exterminated, "Time and again they have been saved, not by their own resolution, but by the world taking them at their own low self-evaluation and endeavouring to deliver them the consummation they devoutly wish. Only then are they able to come together as a people, mend their division, and celebrate their escape as one more proof of the divine protection to which their specialness entitles them."

Dominant among Jacobson's theories is the notion of the scapegoat, a creature society cannot live without. In the words of one of his many enigmatic, ambiguous characters, "You cannot have a one-sided coin". What this new society requires, she and others finally realise, is the "equilibrium of hate".

J is not an easy novel, not only because of its challenging subject but because Jacobson indulges himself too far, in his gobbets of dense, philosophising material. Carefully choreographed though it is, it too soon grows wearying, robbing his final chapter of much of the dramatic punch it should deliver. Less would have been more effective, economy most eloquent than a soapbox. And yet, like all cautionary tales, the savagery of his imagery and his conclusions, are impossible to forget, and maybe even to deny.