A new joint cabinet committee on constitutional reform which brings together Liberal Democrats and ministers met for the first time last week, but some in the party believe it could mean a loss of independence.
The Liberal Democrat leader suggested he was prepared to take risks in order to win greater influence over government policy. However, he would continue to oppose Labour on many other issues.
"Although we work with Labour in areas where it is good for the country to do so and where we agree, we do not have difficulty in being a more effective opposition in issues like under-funding our education and health, where Labour has frankly broken its promises. It is monstrous to have a situation where you agree about something, but still refuse to work together in order to put it into effect."
At a lunchtime fringe meeting, the party's Social Security spokesman in the House of Lords, Earl Russell, compared working with Labour to dining with Beelzebub.
"I have no objection whatever to issue-based co-operation. I believe in it strongly. I have no objection at all to supping with the Devil - that's day-to-day politics. What I object to is having to call him an angel because I want my dinner," he said. "... If we go into coalition on the basis of Labour's present policy, I might find that Ian Forster was right: the tragedy of life is that one gets what one wants."
Liz Lynne, the former Liberal Democrat MP for Rochdale who lost her seat to Labour at the general election, also argued that the party should remain proudly independent: "Working with like-minded people, yes. With people in the Cabinet on constitutional reform, yes. But I am sorry to say we won't find those like-minded people in the Cabinet protecting the vulnerable in society. We will find those like-minded people elsewhere."
Lord Rodgers, a former Labour Transport Minister who defected to the Social Democrats in 1981, urged the party to think about how it could use its new relationship with Labour and described it as a great opportunity. "We must use that opportunity well and not be frightened of it ... There's a mood for economic, social and constitutional change and it has never been so strong. We mustn't shrink from that challenge," he said.
Alan Beith, deputy leader of the party, accused those who had argued against working with the Government of "political immaturity".
"Like children who have never grown up, they say `If you speak to him you can't be a friend of mine. You can't talk to my gang and his gang at the same time'."Reuse content