Tony Blair, the Labour leader, has re-opened a dialogue with Paddy Ashdown, leader of the Liberal Democrats, on the basis of a strengthened Labour commitment to a referendum on electoral reform.
The two leaders spoke when they met at the VJ Day commemorations the weekend before last, although spokesmen for both sides yesterday denied that they had agreed a "non-aggression pact". A spokesman for Mr Blair said: "They had a brief and purely social conversation."
But it is understood that good relations have been restored after the bitterness of the Littleborough and Saddleworth by-election. Chris Davies, the Liberal Democrat accused by Labour of being "high on tax and soft on drugs", won by fewer than 2,000 votes.
And supporters of co-operation between the two parties claim that, since the local elections in May, the number of councils run by joint administrations of the two parties has jumped from 29 to over 40.
The Independent on Sunday yesterday reported that the promise of a referendum on changing the voting system for election to the Commons would be written into Labour's manifesto, although a timetable would not be specified.
This reinforces the affirmation of the policy by Jack Straw, Labour's home affairs spokesman, last week, which came after speculation that the Labour leadership would allow the policy to be dropped. Sources close to Mr Ashdown confirm that he was "very concerned" by suggestions that Labour might abandon the referendum pledge. Mr Blair and Mr Ashdown were also reported to have struck an agreement on VJ Day not to make personal attacks on each other, and to work together on policies on welfare, the health service, Europe and the constitution.
Mr Ashdown's office said yesterday: "They had no discussions of this sort on VJ Day." He added: "The Liberal Democrats' position, set out in May, has not changed. No quarter for the Tories and no let-up on Labour."
But Calum MacDonald, a Labour MP and member of a group advocating closer links with the Liberal Democrats, Labour Initiative on Co-operation, said it would be "only sensible" to refrain from personal attacks and to discuss policy.
"I don't think anything has happened over the summer other than the Labour and Liberal Democrat parties building up a record of co-operation in local government," he said.
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