  X-ray spectral timing analysis is presented of XMM-Newton observations of the
narrow line Seyfert 1 galaxy I Zwicky 1 (I Zw 1) taken in 2015 January. After
exploring the effect of background flaring on timing analyses, X-ray time lags
between the reflection-dominated 0.3-1.0keV energy and continuum-dominated
1.0-4.0keV band are measured, indicative of reverberation off the inner
accretion disc. The reverberation lag time is seen to vary as a step function
in frequency; across lower frequency components of the variability, 3e-4 to
1.2e-3Hz a lag of 160s is measured, but the lag shortens to (59 +/- 4)s above
1.2e-3Hz. The lag-energy spectrum reveals differing profiles between these
ranges with a change in the dip showing the earliest arriving photons. The low
frequency signal indicates reverberation of X-rays emitted from a corona
extended at low height over the disc while at high frequencies, variability is
generated in a collimated core of the corona through which luminosity
fluctuations propagate upwards. Principal component analysis of the variability
supports this interpretation, showing uncorrelated variation in the spectral
slope of two power law continuum components. The distinct evolution of the two
components of the corona is seen as a flare passes inwards from the extended to
the collimated portion. An increase in variability in the extended corona was
found preceding the initial increase in X-ray flux. Variability from the
extended corona was seen to die away as the flare passed into the collimated
core leading to a second sharper increase in the X-ray count rate.
