Andrew Grice: The Week In Politics

Sir Menzies must take off the gloves if he wants to win

When a Liberal Democrat MP watched a comedy at the theatre in his constituency, the biggest laugh of the night came with a mock request by the local newspaper for him to tell it first if he had any skeletons in his cupboard.

Britain's third party has become a bit of a joke since personal crises engulfed its leading members Charles Kennedy, Mark Oaten and Simon Hughes. One MP summed up the mood of his local party members. "At work, everyone takes the piss. It's as if your team has just been knocked out of the FA Cup by a club several divisions below, and the manager has been sacked."

When the three candidates to be the new manager -Sir Menzies Campbell, Chris Huhne and Mr Hughes - appeared before party members, they found them more interested in policies than personal peccadilloes. More worryingly, the public did not seem so forgiving: on BBC Television's Question Time on Thursday, the first few questions were all about the troubles of Mr Kennedy, Mr Oaten and Mr Hughes.

All the signs were that the trauma would would harm the party's standing with the voters. So senior Liberal Democrats had little hope of winning Thursday's parliamentary by-election in Dunfermline and West Fife. Their relief yesterday at the party's spectacular victory in Gordon Brown's backyard was palpable; the Liberal Democrat team can still win big Premiership games after all.

So who will be the new manager? The race is getting close. Even before the by-election win, the leadership election had been brought to life by a YouGov poll of party members putting Mr Huhne, who was initially the rank outsider, in first place.

He angered his fellow-modernisers by reneging on a personal promise to back Sir Menzies and by running himself. They thought him duplicitous: when he was to attend a Campbell campaign meeting, he was, oddly, "stuck in traffic".

But he has travelled far since, capitalising on a faltering campaign by Mr Hughes, who lost some of his natural support by giving misleading answers to questions about his sexuality. Despite the YouGov poll, my hunch is that Mr Huhne is probably second, behind Sir Menzies, whose telephone canvassing returns show him nine points ahead of Mr Huhne. But it is Mr Huhne who has the crucial ingredient: momentum.

He has used the skills he acquired in 19 years as a journalist to grab media attention and set the campaign's agenda. That might be a pretty good qualification to lead a party that has to fight hard for positive coverage, indeed, sometimes any at all. Mr Huhne dismissed his long initial odds by pointing to David Cameron's 3 per cent rating early in the Tory leadership stakes.

This weekend, Liberal Democrats are asking whether the curse of the front-runner, which struck down David Davis in the Tory contest, is about to kill off Sir Menzies.

He now needs to take his gloves off and land some bare-knuckle blows on Mr Huhne. Some allies have been pressing him to do this but attacking colleagues does not come easily to Sir Menzies, who sometimes seems too gentlemanly for his own good.

He refuses to play to the Liberal Democrat gallery like his two rivals. They have called for British forces to be withdrawn from Iraq by the end of this year, a pretty empty pledge since there is no prospect of the Liberal Democrats having to implement it.

Sir Menzies refuses to match it, saying quite sensibly that troop withdrawals must depend on events on the ground.

His opponents have also questioned his credentials on the Iraq war. Although he became one of Tony Blair's most effective critics, he did fret about Charles Kennedy's decision to join the anti-war march on the eve of the conflict. "Criticising Ming on Iraq is like attacking the runner who wins the race for being slow out of the starting blocks," said one aide.

Sir Menzies is not enjoying the campaign as much as Mr Huhne, who has nothing to lose and, even if he comes second, will have emerged as a potential future leader, to the chagrin of the Young Turks who are backing Sir Menzies now in the hope that their turn will come later.

Mr Huhne might have done even better in a longer, Tory-style leadership election as the lesser known of the three candidates after only nine months as an MP. After the YouGov poll, he is certain to get more attention, and it will make or break his leadership bid.

Fellow members of the party's centre-right "Orange Book" brigade, several of whom are supporting Sir Menzies, accuse Mr Huhne of turning left and pandering to Liberal Democrat members with a "lowest common denominator" campaign.

They remember him recently floating plans for tax cuts. Now he calls for tax rises for the rich. They remember him championing cheap air fares as an MEP. Now he is a green crusader. They worry that, if he wins, his calls for a rise in petrol prices and cuts in tax relief on pensions for higher rate taxpayers would harm the party in its battles with the Tories.

To halt Mr Huhne's bandwagon, Sir Menzies, whose watchword is consistency, is going to have to get his hands dirty and attack some of these contradictions.

The Dunfermline by-election shows that those who write off Britain's third party do so at their peril. For all of its recent troubles, it could still hold the balance of power after the next election.

Similarly, Sir Menzies can no longer ignore the third man in the leadership race. Otherwise, he might come first.