Cameron phone call exposes cracks in party unity

Morale was low among Liberal Democrat staffers as they trudged back to the party's Westminster headquarters from a private party gathering at the nearby National Liberal Club.

As they awaited the arrival of Nick Clegg, who was heading down from his Sheffield Hallam constituency, they were left to reflect on how the party had begun the previous evening hoping for a record result and ended it counting how many seats had been lost.

When their leader finally arrived, his determination to bounce back from the electoral fall boosted their spirits. But he gave them a frank assessment of the Liberal Democrat performance. It had been a major disappointment, he admitted, adding that he knew it would have been a huge let-down to party workers. "But you should be proud of what we achieved," he said.

The attempt to raise the spirits of those around him was as much for his benefit as for their's. Mr Clegg was well aware he had no option but to dust himself down quickly. With no overall winner, he knew the short speech he was about to deliver on the doorstep of the party's Cowley Street home would set off the horse-trading inevitably delivered by a hung parliament.

Shortly before 11am, the man who had argued that he "was not the kingmaker" signalled he would give David Cameron the chance to enter Downing Street. He said it was a "very fluid political situation", but he intended to fulfil his pledge to give the first chance to form a government to the party with the strongest mandate. "I have said that whichever party gets the most votes and the most seats has the first right to seek to govern, either on its own or by reaching out to other parties – and I stick to that view," he said. "I think it is now for the Conservative Party to prove that it is capable of seeking to govern in the national interest."

As if to reassure members of his own party already dead set against working with a Cameron government, he ended his statement with a reassertion of the importance of electoral reform. "This campaign has made it abundantly clear that our electoral system is broken," he said. "It simply doesn't reflect the hopes and aspirations of the British people. So I repeat again my assurance that, whatever happens in the coming hours and days and weeks, I will continue to argue not only for greater fairness in British society, not only for greater responsibility in economic policy-making, but also for the extensive reforms that we need to fix our political system." Even as he drove off from Westminster to his home in Putney, he awaited a call from the Tory leader.

However, the statement caused turmoil within Liberal Democrat ranks. Even senior figures, many of whom will pressure him to do a deal with Labour, were not clear whether he was genuine in his desire to allow Mr Cameron into No 10 or whether he was simply covering his tracks before bartering with Gordon Brown over a new voting system.

Well before Mr Cameron made his pitch to Mr Clegg, one of the Liberal Democrat figures involved in negotiations with the other parties was hinting that they were already minded to form a "progressive coalition" with Labour in opposition. It would see Mr Cameron form a minority government, with the Liberal Democrats refusing to form a coalition with the Tories.

When Mr Cameron's offer to the Liberal Democrats emerged, proposing co-operation on schools, tax and an "all-party committee of inquiry on political and electoral reform", unease in the ranks increased further. Some figures were already putting pressure on Mr Clegg not to prop up a Cameron government without securing a stronger pledge on electoral reform. Lord Ashdown will be a key go-between for the negotiations with the Tories because of his close relationship with Mr Cameron's chief of staff, Ed Llewellyn. The pair are old friends. Yet even Lord Ashdown is thought to be against working closely with Mr Cameron.

Meanwhile, the party's coalition guru, Lord Wallace, who played a key role in negotiating governments in Scotland, appeared to endorse an approach allowing Mr Cameron in to Downing Street, but challenging him over certain parts of his programme.

The phone call from Mr Cameron to Mr Clegg arrived shortly before 4pm. But it is today the Liberal Democrat leader will be forced to confront his role of reluctant kingmaker. His MPs and peers will meet to discuss the next move. The offers on the table from the Tories and Labour will be discussed.

Under the party's "triple-lock" system, Mr Clegg will need the backing of three-quarters of his MPs and members of the party's federal executive committee to enter into a "substantial proposal which could affect the party's independence of political action". If he does not receive that backing, the issue would be decided through a conference of members. The party is confident the process can be carried out swiftly.

The frenetic negotiations masked what was a disastrous election. Sky-high expectations were blown apart after an exit poll suggesting they would lose seats proved to be accurate. Their share of the vote, predicted to be around 27 per cent going in to polling day, collapsed to 23 per cent as voters took a last-minute decision not to risk voting for the party.

The National Liberal Club had remained packed at 4am on election night as party members, staff and some peers digested the result. It was at 2.20am, when Willie Rennie lost his Dunfermline and West Fife seat, that one of those present realised it was turning into a difficult evening. "That was the moment that something clicked with me," they said. "It was not going to be the night we had hoped for."

It's hello to ...

Ian Swales

Benefited from anger in Redcar at mothballing of Corus steel plant and 1,600 job losses.

Stephen Lloyd

Shocked Tories in Eastbourne after campaign against hospital and post office closures.

It's goodbye from...

Lembit Opik

Lost Montgomeryshire to the Tories. Politics will not see the likes of his entourage again.

Julia Goldsworthy

Owner of a taxpayer-funded "designer pink rocking chair", lost to Tory George Eustice in Camborne & Redruth.

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