The short-term spectral variability of the narrow-line Seyfert 1 galaxy I
Zwicky 1 (I Zw 1) as observed in an 85 ks XMM-Newton observation is discussed
in detail. I Zw 1 shows distinct modes of variability prior to and after a flux
dip in the broad-band light curve. Before the dip the variability can be
described as arising from changes in shape and normalisation of the spectral
components. Only changes in normalisation are manifested after the dip. The
change in the mode of behaviour occurs on dynamically short timescales in I Zw
- The data suggest that the accretion-disc corona in I Zw 1 could have two
components that are co-existing. The first, a uniform, physically diffuse
plasma responsible for the "typical’’ long-term (e.g. years) behaviour; and a
second compact, centrally located component causing the rapid flux and spectral
changes. This compact component could be the base of a short or aborted jet as
sometimes proposed for radio-quiet active galaxies. Modelling of the average
and time-resolved rms spectra demonstrate that a blurred Compton-reflection
model can describe the spectral variability if we allow for pivoting of the
continuum component prior to the dip.