Lib Dems' pact with Blair is falling apart

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TONY BLAIR and Paddy Ashdown were struggling last night to keep alive their policy of closer co-operation between their parties after the Liberal Democrat leader's decision to resign. Although they insisted Mr Ashdown's departure would not affect their strategy, senior figures in both parties said privately that it was now in jeopardy.

Cabinet heavyweights who oppose closer relations, including Jack Straw and John Prescott, believe Mr Ashdown's resignation has finally buried any prospect of Mr Blair calling a referendum on electoral reform before the general election. Plans to extend the remit of the Cabinet committee of senior Liberal Democrats and Labour ministers will run into the sand. The leaders had hoped it would discuss the single currency and welfare reform. Mr Blair's critics believe that relations with Labour will dominate the leadership contest. A Blairite minister admitted Mr Ashdown's decision was "bad news", adding: "Tony may have to pull back; he cannot be so far out in front of his party on every issue."

Yesterday Mr Blair told the Cabinet that co-operation with the Liberal Democrats would continue. Earlier he said: "People want a different party politics today. They don't want parties stuck in rigid tribal boundaries."

But Gordon Prentice, Labour MP for Pendle, warned: "We've got this incredible schizophrenic attitude towards them [the Liberal Democrats] where we can fight them on the ground and here at Westminster we are developing policy jointly with them. That cannot survive Paddy Ashdown's departure."