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Clegg suffers double blow and faces party backlash

Defeat looms in AV and council polls while Lib Dems vow to hit back at Tories

Nick Clegg was heading for a humiliating double defeat early today in the English council elections and the referendum on the voting system.

There were signs of a backlash against Mr Clegg from some of his MPs and councillors as the first local authority results emerged in the early hours of this morning. Lib Dem officials conceded they would suffer a bloody nose in the North of England, where Labour mounted a fightback in its traditional strongholds.

Early results in the Scottish Parliament elections suggested the Lib Dem vote had collapsed north of the border. The Scottish National Party (SNP), rather than Labour, appeared to be the main beneficiary, boosting Alex Salmond's chances of retaining power.

Mike Hancock, Lib Dem MP for Portsmouth South, warned that Mr Clegg would now need to drive a harder bargain with Mr Cameron inside the Coalition. He told the BBC: "He still needs our votes to get a majority in Parliament. We have got to say that the price of our support is a bit harder than it has been up to now. Maybe he has had too easy a ride... Maybe we have to twist his arm a bit harder."

Officials on both sides of the referendum campaign reported a low turnout. The No camp was optimistic that when the result is declared tonight, it will defeat calls for a switch to the alternative vote (AV), which could kill off any prospect of electoral reform for many years. Some figures in the Yes camp are privately resigned to a defeat by about 60 to 40 per cent. Sadiq Khan, the shadow Justice Secretary and a close ally of Ed Miliband, told Sky News early today: "I'm afraid the Yes vote is lost for a generation."

Senior Lib Dems warned Mr Cameron that he would pay a price for allowing personal attacks on their leader by the Tory-led No campaign which opposed electoral reform. They predicted that their partnership with the Conservatives would be permanently damaged by the "vicious" criticism of Mr Clegg.

Lib Dems threatened a revenge attack in which they would block plans to redraw the UK's parliamentary map. The move could destabilise the Coalition because Mr Clegg's party agreed to back Tory proposals to cut the number of MPs from 650 to 600 in return for granting yesterday's referendum on whether to keep the first-past-the-post system. The planned boundary review had been expected to boost Tory prospects at the next general election by depriving Labour of at least 20 seats.

Lord (Paul) Tyler, Lib Dem spokesman on constitutional affairs in the House of Lords, told The Independent: "Lib Dem MPs and peers don't hold the same view of our Coalition allies as we did a few weeks ago. The No campaign has been funded, organised and in effect driven by the Conservative Party. It's a fact of life that there is less enthusiasm today than there was a month ago for the detailed day-to-day support for each other's priorities. It is by no means a done deal that the next election will be fought under new boundaries."

Mr Cameron is expecting heavy Tory losses in the local authority elections, but allies said his standing would be enhanced by a No vote in the referendum.

Although senior Lib Dems insisted the partnership government would carry on, Lord (Paddy) Ashdown, the party's former leader, said Mr Cameron's refusal to disown its "regiment of lies" would have long-term consequences for the Coalition, including the terms on which it eventually ends. He said: "So far the Coalition has been lubricated by goodwill and trust. It is not any longer."

He added: "You cannot fund a deeply vicious campaign to destroy the personality of your partner, who has been unmoved in his brave support of the Coalition, without there being consequences."

Lord Oakeshott, the party's former Treasury spokesman in the Lords, said: "Cameron's performance in pretending he had nothing to do with the No campaign's attacks on Clegg was shameless. At least Pontius Pilate had the decency to wash his hands."

Lord Tyler denied his move was a "tit- for-tat" response to the attacks on Mr Clegg. Insisting that it would not breach the Coalition Agreement, he said: "It would not be tearing up the boundary review, it would be postponing it." Some elements of the agreement would be more difficult to honour after the referendum campaign, he added.

The Tories would react furiously to any attempt by the Liberal Democrats to stall the boundaries shake-up. Lib Dem sources said Mr Clegg is wary of looking like a "bad loser" if AV is rejected.

Last night, Labour officials predicted town hall gains in every region of England. A Labour source said: "This shows we need a change of direction, not business as usual."