Although deeply angry at Labour's aggressive campaign against the Liberal Democrat victor, Chris Davies, Mr Ashdown said: "Of course parties co- operate, as we have done with the Conservatives, and we are prepared to do with Labour."
John Major brushed aside the "disappointing" result which lost the Conservative Party the seat and left it in third place, but insisted that the Tories' showing of 24 percent demonstrated that "the bedrock of the Conservative vote stayed there more effectively in this by-election".
While the Opposition celebrated the sixth successive Tory by-election loss in this Parliament, the style of the campaign and the closeness of Mr Davies's 1,993 majority, provoked soul searching among Liberal Democrats about the party's relations with Labour.
Mr Ashdown, who just before the by-election tilted his party towards Labour by announcing that the Liberal Democrats would not prop up a minority Tory government, was clear the next move was up to Mr Blair.
"Part of a new politics that I believe in, and I understood Mr Blair believed in too, was the fact that we respect each others' parties and we respect our candidates.
''I leave you to decide whether that's been done but this is a matter for Labour to consider, not us."
Alan Beith, the Liberal Democrat deputy leader, was more forthright, accusing Labour of trying to "target our candidate by saying he believed or said things he did not believe or say. It was pretty unpleasant sort of campaigning."
Senior Liberal Democrat strategists have made little effort to disguise their irritation with the style of the Labour campaign - managed by Peter Mandelson, MP for Hartlepool but endorsed by the Labour leadership. However, some argue privately that the ferocity of the contest will demonstrate that Mr Ashdown's decision to end "equi-distance" between the two other parties does not imply a new pre-election accord with Labour.
Mr Blair said last night on Channel Four News that he did not think the by-election name-calling would "disturb sensible co-operation on issues where there are things in common between us". He insisted that "hard" competition for votes did not rule out a dialogue of ideas.
Mr Mandelson, the focus of much Liberal Democrat criticism, said: "If we didn't have the campaign we did we would probably still be in third place. An aggressive campaign is one that fights hard on the issues, and we did."
The Prime Minister, whose parliamentary majority is now down to nine (or seven, if the rebel Sir Richard Body votes with the Opposition), dismissed the defeat as "a typical mid-term by-election result".
He insisted his majority was "entirely workable", and said: "I expect to go through until the spring of 1997. That's always been our position."
By-election reaction, page 2
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