Former Liberal Democrat leader Lord Ashdown said the party's "trust" in David Cameron had been damaged as a result of the bitter alternative vote (AV) campaign.
Lord Ashdown insisted the coalition would stand the strain, but relations between the Lib Dems and Tories would be more "businesslike" in future.
He acknowledged it had been a "painful" night for the party, with voters believing they had been betrayed by leader Nick Clegg's decision to enter the coalition.
Lord Ashdown said Mr Cameron's refusal to distance himself from the No campaign's attacks on Mr Clegg ahead of the referendum "diminishes" the Lib Dems' view of the Prime Minister.
He told ITV's Daybreak: "The Prime Minister sets the tone of the politics for the nation. Mr Cameron had many, many occasions to dissociate himself from a campaign - by the way, funded by his party - whose primary purpose was personalised politics attacking his principal coalition partner and spreading scaremongering."
The conduct of the campaign, which together with the local elections provided the first major test of relations between the coalition parties, would fundamentally alter the nature of the administration, he predicted.
"The consequence is not that the coalition will break, there's a job to be done, it still will be done.
"But you cannot behave in that manner without affecting the trust and goodwill.
"It has been so far a relationship lubricated by collegiality, congeniality and trust. There will be less of that now.
"It's not less of a job to do, but the thing is going to be more businesslike, it's going to be more transactional.
"Who knows, it may be all the better for that."
Even Mr Clegg's own aides admit that the Liberal Democrats have suffered an "absolute kicking" in the local elections.
The party is braced for more bad news when the result of the AV referendum is declared.
The Lib Dems lost swathes of seats in former council strongholds in the north of England - including Sheffield where Mr Clegg is an MP - to Labour, while haemorrhaging support to the Scottish National Party north of the border.
Lord Ashdown said: "It's a painful night for us ... we acted in what we believed, and what I'm sure is right, is in the national interest to clear up the mess left behind by Labour.
"We believed, perhaps a little over-optimistically, that the British people would understand the difference between compromise and betrayal.
"But I think we have this morning to recognise with a little humility that there will be many who gave us their vote last year who don't see it that way and we are going to have to spend a bit more time to persuade them.
"This is not betrayal, it is acting in the national interest, it is making compromises - how else can you run a coalition?"
Gary Long, leader of the Lib Dem group on Nottingham City Council, called on Mr Clegg to step down.
He told BBC Radio 4's Today programme: "I'm in favour of the coalition but I think he's run it very badly and in my view he should resign immediately."
But Paul Scriven, the Lib Dem leader in Sheffield and a close ally of Mr Clegg, said both coalition parties had to "take some of the pain" because they were having to make "really difficult decisions" to clear up the "toxic debt" left by Labour.
Asked whether he had faith in Mr Clegg he told Today: "What we need at the moment is a leader who's not going to do a Blair or a Brown, ie, flip flop every time a result comes in or there is an opinion poll.
"What Nick Clegg brings to this Government is two things - first of all, the absolute resolve and backbone to see out, even in these difficult situations for the Liberal Democrats, getting the economy back into balance.
"And secondly, bringing a real Liberal Democrat and distinct fairness agenda to the Government to show that it isn't the Tories of the 1980s."
Lord Ashdown suggested the Tories' handling of the No to AV campaign had been "bloody stupid".
He told Today: "If the Conservatives fund to a level of about 90% a No campaign whose primary task is to bring down their coalition partner, and then hand control of that over to the Labour war horses, and then stand back and say: 'Nothing to do with me guv' - I don't put that in the box marked betrayal but I put it in the box marked bloody stupidity.
"And the truth is there are consequences for that."
Lib Dem MP Bob Russell, who has been a vocal critic of some of the coalition's policies, gave his full backing to Mr Clegg.
He said the party had been seen as a "whipping boy" by the electorate but insisted that was to be expected in government.
The Colchester MP said the party had bucked the national trend in his area but added: "It's regrettable that what happens at a national level affects what happens in town hall elections.
"But there's no change there, that's always been the case. Unfortunately whereas in the past the Liberal Democrats have been the beneficiaries from the government of the day, in these elections the Liberal Democrats have been the whipping boys."
Responding to Lord Ashdown's prediction of a change in the relationship between the parties, he said: "I think there's always been a business arrangement.
"I have spent 40 years opposing the Conservatives and I haven't changed overnight."
He added that he was "backing Nick Clegg 100%" and called on others in the party to support the leader they elected.
Mr Russell said it was "bizarre" that support had gone to Labour, who had left the economic legacy the coalition was tackling.
"It's like rewarding the bank robbers rather than the policemen who caught them.
"It's just bizarre that people have such short memories."
Business Secretary Vince Cable told BBC Radio 5 Live he did not think the results raised any leadership questions, and that in fact the highly personal attacks made on Mr Clegg during the campaign would "increase support and sympathy for him within the party".
He said: "We joined the coalition for a very good reason: that is was necessary for parties to work in the national interest to sort out our economic mess. That remains the case and it will remain the case.
"But within that we have, as a party, got to assert our own identity, our own independence."
Dr Evan Harris, a vice chair of the Liberal Democrat Federal Policy Committee and a spokesman for the Social Liberal Forum party group which speaks for the many centre-left party activists, maintained the party would "bounce back".
He said: "The party knew when we entered the coalition last year that we would suffer at the mid-term polls even if we got across the message that compromise was not betrayal and was the best thing to do for the sake of the country.
"The party is overwhelmingly united behind Nick Clegg and the need to demonstrate more effectively to the electorate not only what we have achieved to deliver fairness and protect civil liberties but also what we have stopped the Tories from doing. But we expect our ministers to help more in that task.
"The party is resilient enough to cope with these bad results and to bounce back and we will not be panicked into internal bickering or into threatening to pull out of the coalition - a commitment we made to give the country stable Government which we will deliver on."
Energy Secretary Chris Huhne said the party needed to hold its nerve and it would reap the reward at the ballot box.
"I don't think it is time for a change in leadership. I absolutely think that we have made the right decision to go into government," he told BBC Radio Solent.
"We need to hold our nerve, see our way through it and as the economy improves and the jobs come back we will get electoral reward and Nick will be shown to be the leader who has taken the right decisions."
Mr Cable told the BBC News channel: "We have had a bad night and we have taken the punishment of voters.
"The Tories, in a way, have been fortunate that they were wiped out in those north of England cites and in Scotland a decade or two decades ago and we've, in a sense, been defending the Government against Labour in those areas."
Mr Cable said his party would not be deflected from its mission to rebuild Britain's economy and he branded Lib Dem members "resilient people".
Lib Dems needed to "argue their corner" in Government, he added.
"We need perhaps to be a bit more proactive in talking about the things we have achieved, for example the tax policies that have lifted large numbers of low-income, middle-income people out of tax," he said.
Conservative Cabinet Office Minister Francis Maude agreed with Mr Cable on his analysis of Northern cities.
"The Conservative Party had vacated some space, not deliberately, in some of the big Northern cities and the Lib Dems had become in those cities the major opposition in some of Labour's heartlands," he said.
"So it's not particularly surprising that Labour are pulling back some ground there."Reuse content