Node.js (npm) refuses to find python even after %PYTHON% has been set

TL;DR Make a copy or alias of your python.exe with name python2.7.exe

My python 2.7 was installed as

D:\app\Python27\python.exe

I always got this error no matter how I set (and verified) PYTHON env variable:

gyp ERR! stack Error: Can't find Python executable "python2.7", you can set the PYTHON env variable.
gyp ERR! stack     at failNoPython (C:\Program Files\nodejs\node_modules\npm\node_modules\node-gyp\lib\configure.js:103:14)

The reason for this was that in node-gyp's configure.js the python executable was resolved like:

var python = gyp.opts.python || process.env.PYTHON || 'python'

And it turned out that gyp.opts.python had value 'python2.7' thus overriding process.env.PYTHON.

I resolved this by creating an alias for python.exe executable with name node-gyp was looking for:

D:\app\Python27>mklink python2.7.exe python.exe

You need admin rights for this operation.

I figured out the most stable solution is to set python npm internal value to actual path:

npm config set python C:\Programs\Python2.7\python2.7.exe

This skips all environment variable and %PATH% crap and just starts the python wherever it's installed.