The move, to be announced in Charles Kennedy's first reshuffle after this week's party conference, will be seen as a possible first step to the election of Mr Hughes as deputy leader if Mr Beith steps down.
Mr Hughes, the party's health spokesman, ran Mr Kennedy a close second for the leadership and has been privately guaranteed a key campaigning role by the new leader.
Mr Kennedy has decided to promote Mr Hughes to give the party a distinctive voice against Jack Straw, the Home Secretary, and Ann Widdecombe, the Tory spokeswoman. Elevating Mr Hughes to a more high- profile role would be popular with grassroots activists and would give an influential voice to those most opposed to closer relations with Labour.
Mr Hughes stepped up the case against a closer link yesterday, warning that it would undermine the party's "credibility" at the next election. He said voters may get "confused" about what Liberal Democrats stood for if the party lost its distinctiveness. Speaking at The Independent's fringe meeting, he said the party should fight the Government in areas of social injustice and public services with "its guns blazing". He said: "The electorate will judge us where we are different and not where we are the same as other parties. We will confuse the voters and they will not feel close to us and what we stand for."
Malcolm Bruce, the party's Treasury spokesman, also sought to toughen opposition to any extension of the joint cabinet committee to cover health and education. He told delegates: "If Gordon Brown puts income tax cuts ahead of cutting NHS waiting times, class sizes and the needs of colleges and universities, we will vote against the next Budget."
Matthew Taylor, the MP for Truro and St Austell and an aide of Mr Kennedy, stressed how successful co-operation with Labour had been on constitutional issues. The joint cabinet committee's remit includes devolution, House of Lords reform and electoral reform. "Co-operation is about building a coalition of support that goes beyond the Liberal Democrats. We do not just have to win the minds but also the hearts of people in the Labour Party to achieve electoral reform for Westminster," he said.
Mr Hughes stressed it would only be possible to win over Labour votes if the party increased attacks on the Government's failure to deliver on public services.
Mr Kennedy's aides believe Mr Straw and Miss Widdecombe are vying to see who can sound the most right-wing. Mr Hughes will give the Liberal Democrats a more liberal, radical appeal, they believe, with sharply differing policies on crime, prisons and immigration.
A programme of law and order and welfare changes to help lift people out of poverty will be put forward today by Mr Hughes. Writing in The Independent, he calls for the redistribution of work, people, wealth and power. He said the Government should increase wealth for the poorest 10 per cent.
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