Kennedy refuses to rule out coalition with Labour

Charles Kennedy urged his party to raise expectations and "believe in ourselves" in the run-up to the general election yesterday, as he refused to rule out forming a coalition government with Tony Blair.

Charles Kennedy urged his party to raise expectations and "believe in ourselves" in the run-up to the general election yesterday, as he refused to rule out forming a coalition government with Tony Blair.

The Liberal Democrat leader, striking an optimistic note as he opened the party conference in Bournemouth, said the party was in "good heart" and was in a position to "take the fight to our competitors".

Mr Kennedy said the Liberal Democrats were now a serious political force operating in an era of three-party politics. Lord Razzall, chairman of the Liberal Democrats campaigns committee, said the party was "at a high watermark in terms of our expectations and achievements". But Mr Kennedy refused to rule out co-operating with Labour after the next election, and made it clear he would keep up pressure on Mr Blair to abolish the first-past-the-post voting system for Westminster and introduce proportional representation.

Last week Mr Kennedy ruled out entering an electoral pact with the Conservatives. But yesterday, asked repeatedly at a press conference if he would rule out a coalition with Labour, he declined to do so. "We will not get distracted by noises off: what we would do in a Parliament with no overall majority - assuming that we are an opposition party at that point," he said. "And I don't know what the arithmetic for the next House of Commons is going to be and I am not going to get into the endless permutations."

Mr Kennedy hinted the Liberal Democrats could support the Government on issues the two parties agreed on.

"We are quite easily accessible and willing to work with others on issues where we can make a common cause but that's very different from suggesting or implying in any way that you can subsume your identity between now and then or indeed beyond that moment," he said.

Mr Kennedy's remarks preceded a stinging attack on Mr Blair, who he said must publicly apologise for the "illegal" war in Iraq. In his strongest personal criticism of the Prime Minister yet, Mr Kennedy seized on revelations in leaked documents published this weekend that suggested Mr Blair was in favour of "regime change" in Iraq a year before the invasion. He said questions still needed to be answered about the nature of talks between Mr Blair and President George Bush in the run-up to the war. Mr Kennedy told a rally of Liberal Democrat activists that the decision to go to war was "the biggest foreign policy error committed by a British government since Suez".

He accused Mr Blair of "a litany of betrayal" and of stretching the truth over the basis for going to war, including the assertion that Saddam Hussein had weapons of mass destruction. "Prime Minister, why not just, even now, admit you got it wrong? Apologise. Say sorry for the damage you have done, the anguish you have caused, the wrongs that you can never now right," he said.

Mr Kennedy said he wanted to focus on the domestic agenda at the Bournemouth conference, which will be used to consolidate the Liberal Democrats' policies in the lead-up to the general election.

Expressing optimism about the party's chances in the Hartlepool by-election on 30 September, he accused Labour and the Tories of slinging "bile and vitriol" in an attempt to undermine the Liberal Democrat candidate, Jody Dunn.