The European Elections: Lib Dems defiant despite few seats - Party strategists insist the tactics they adopted paid off. Patricia Wynn Davies reports

LIBERAL Democrat strategists remained in defiant mood yesterday despite winning only the same number of seats as the Scottish National Party.

A heavy literature campaign for south-west England in the build- up to next year's district council elections is already under way.

Senior party figures were unrepentant in denying the accusation that, like the SNP, they are a 'regional' party - and one doing less well than some predicted at that. They insist that the targeting strategy deliberately adopted by Chris Rennard, director of election campaigns, and Matthew Taylor, chairman of campaigns and communications, had paid off.

Despite the best efforts of Conservative Central Office to play down the threat, the Liberal Democrats have emerged second with 30.8 per cent of the vote across the south of England, excluding London, and first in the South-west with 33.9 per cent.

There is still everything to fight for in more than 20 Westminster seats, they insisted yesterday.

It is probably no coincidence, however, that efforts to give the electorate a reason for voting Labour have been redoubled.

There is a world of difference between full employment and full 'employability', Paddy Ashdown, the Liberal Democrat leader, insists in this newspaper today.

The goal of unlocking talent through training and education, identified by his party as a core policy, will be amplified this week by Sir Ralph Dahrendorf, warden of St Anthony's College Oxford, who heads a Liberal Democrat- sponsored commission on the economy, and followed up in a detailed document in a couple of months' time.

Stripped to its basics the uncompromising message is that those who maintain there is any such thing as full employment are guilty of a cruel deception, however worthy their intentions. Liberal Democrats have labelled it radical. More than that, stopping at 'employability' is a position which not even Tony Blair, the man most likely to lead the Labour party, is expected to feel able to overtly embrace.

It is the first post Euro-election sign of the third party sharpening its profile, a recognition that more work was needed to define what it stood for, and a manifestation of behind-the-scenes efforts aimed at ensuring that Liberal Democrat messages are put across more simply, and more clearly.

Amid the outward cheerful determination, however, yesterday's election post-mortem was already throwing up differences of view over future strategy and private mutterings about the management of the European campaign.

It was claimed in some quarters that Mr Ashdown should not have spent so much time 'charging around the country', committed though that exercise was, but mounted a serious media operation in London.

The 16.1 per cent share of the vote nationally, moreover, was said to be 'deeply disappointing'. This train of Liberal Democrat thinking argues for a new strategy, a new position vis-a-vis a Labour party led by Tony Blair - one that would define the party as a 'guarantor' of Labour success and the end of Tory government.

'People have got to stop claiming these elections were a success and come to terms with the reality of where we are,' one senior Liberal Democrat said. At least in the shorter term, that view is set to remain a minority one.

Despite Labour's insistence yesterday that it could do without the Liberal Democrats, Lord Holme, a senior party strategist, insisted there would no 'headless chicken run round', nor any headlong rush to frisk at the new prince's (Mr Blair's) feet - and certainly not while the bloom was still fresh on his cheek. Some senior Liberal Democrats believe that Mr Blair would be open to a post-election coalition if Labour hopes of outright victory do not materialise. In the meantime they are likely to keep their powder dry.

As Mr Ashdown put it at yesterday's news conference, there was no certainty, particularly on the basis of low turnout European elections, that Mr Blair would prove to be the handsome prince that woke sleeping beauty Britain.

'Behind the handsome prince there lurk some of the biggest ogres and giants in the forest. You have to kill the giants before you get the woman to grant the prince her hand.'

There were suggestions too yesterday that the Liberal Democrats may choose never to define their relationship with Labour.

Ashdown's view, page 17

(Photograph omitted)