Tensions mount in Coalition over 'gutter politics' of anti-AV Tories

Cabinet tensions over the electoral reform referendum burst into the open last night after a senior Liberal Democrat minister challenged the Conservative Party chairman to disown the "scaremongering" and "gutter politics" of the "no" campaign. Chris Huhne tore into its claim – reinforced in an advertising campaign – that a "yes" result in the poll on 5 May over replacing the first-past-the-post system with the alternative vote (AV) would cost Britain £250m.

He targeted his anger at his Tory Cabinet colleague, Baroness Warsi, in a bluntly worded letter that exposed the growing strains between the Coalition partners on the issue.

Mr Huhne challenged her, as the Tory chairman and a patron of the "no" campaign, to pull the plug on its "scaremongering and misleading" publicity. He attacked the £250m claim, which has been backed by the message that the money could be used to treat sick babies or buy body armour for soldiers, as the "politics of the gutter".

Mr Huhne, the Secretary of State for Energy and Climate Change, wrote: "When David Cameron launched his 'no' campaign, he said this should not be a source of tension between us or risk breaking the Coalition. It won't, if your 'no' camp now withdraws these disgraceful advertisements and campaigns on facts not fears, substance not smears."

Mr Huhne's letter reflects mounting anger among senior Liberal Democrats, including Nick Clegg, about the refusal to withdraw the £250m claim. The "no" campaign says the figure has been calculated from the £150m price of electronic machines to count votes cast under AV, the £82m cost of holding the referendum, and a further £20m-plus expense of publicity campaigns to explain the AV system. The "yes" campaign insists the figures are flawed but a "no" campaign spokesman said it stood by the figures and described Mr Huhne's attack as a "sign of desperation".

The clashes came as both sides step up their campaigns this week. A cross-party rally tomorrow in support of change will feature the Labour leader Ed Miliband, the former Liberal Democrat leader Charles Kennedy and the Green Party leader Caroline Lucas. A conspicuous absentee will be Mr Clegg after Mr Miliband refused to share a platform with him. The "yes" campaign said yesterday it has raised £2.5m from 2,725 donors. The largest gift – of £951,000 – came from the Joseph Rowntree Reform Trust.

The "no" campaign will today unveil newspaper advertisements and billboards attacking AV as expensive and a politicians' fix. Yet Vince Cable, the Liberal Democrat Business Secretary, said yesterday he was "pretty sure" the Coalition would survive, even if the public votes against electoral reform.

But he told the BBC1 Politics Show: "There is a lot at stake and that is why we are fighting hard for it."