Kennedy is secure in his leadership, but still a long way from tasting power

His party faces another four years on the sidelines, devising new policies and winning the occasional by-election

Charles Kennedy is in a unique position. He is the only leader of the three main parties who is in an entirely secure position. Tony Blair's pre-conference interviews will focus partly on his own plans for the future and the speculation about whether he had contemplated resignation. Michael Howard will head for Bournemouth in two weeks' time almost certainly aware that the Conservatives' conference could be his first and last as the party's leader. In contrast when Mr Kennedy addresses the Liberal Democrats at their conference today, he will do so knowing that he will lead his party in the election and almost certainly for several years after. In Bournemouth this week, Mr Kennedy looks as if he is enjoying himself.

In itself, this is something of a remarkable turnaround. Mr Kennedy had a wobble of sorts before Easter when he failed to turn up for the Budget, apparently suffering from a violent stomach bug. I am told that senior Liberal Democrat MPs responded by making what they called "contingency arrangements". These included the possible appointment of a caretaker leader. Now the situation could not be more different. In his speech today, it will be a revived Mr Kennedy who will be the disciplinarian, telling his party that its electoral successes will mean a greater scrutiny from political opponents and the media. It is the party that will be called on to meet Mr Kennedy's standards and not the other way around.

On several fronts Mr Kennedy has good cause to feel satisfied. He is too easily dismissed as a "good bloke", as if that were the end of the matter. Such an assessment ignores his skills as a subtle strategist. Almost without anyone noticing he has moved his party away from Paddy Ashdown's close ties with Labour. This was a potentially awkward manoeuvre. One moment the Liberal Democrats were inching towards government, attending a cabinet committee and paying homage to Mr Blair as a leader they could do business with. Now they are back to where they used to be, claiming to be equally distant from both Labour and the Conservatives. The claim is not altogether convincing. They would find it much easier working with a Labour government than a Michael Howard-led Conservative Party. Even so, with a minimum of fuss Mr Kennedy has placed them in a deliberately ambiguous position, capable of attracting disillusioned Labour and Conservative voters.

In policy terms Mr Kennedy has displayed some political courage in two areas. The decision to oppose the war was a considerable political risk. Wars tend to be popular in Britain and opponents face the prospect of disdainful isolation. On the substance of the pre-war debate I am told that Paddy Ashdown was privately a supporter of the war. Lord Ashdown has been a loyal predecessor, but I suspect that opinions from such figures would have weighed heavily on Mr Kennedy's mind. At times he displayed a nervy wariness: yes, he opposed the war, but he also supported the British troops and would therefore not oppose the conflict once it was under way. No, he would not take part in the big anti-war demonstration. Yes, he would take part (a U- turn that alarmed some senior figures in the party). Still, he got there in the end and is now the only leader that can credibly challenge Mr Blair's decision to support President Bush.

I also detect a whiff of political courage over Europe. Those close to him say he wants no fuzziness over this. He is a pro-European and will not pretend to be otherwise. On the surface this appears to be a reckless risk given that his party's best chances are in Conservative seats. But I doubt if ardent Euro-sceptic Tory voters would switch sides if Liberal Democrats suddenly changed their tone.

Mr Kennedy is a big-picture leader, leaving some of the policy detail to senior colleagues. He is lucky to have figures such as Sir Menzies Campbell and Vince Cable around him. Other leaders of the third party have not always had such formidable intellectual power around them. As I argued on Tuesday, this does not mean all the policies cohere or are practical. A significant section of the party's current programme would need considerable revision if it found itself in power after the next election. What is more, Mr Kennedy has allowed an important division to surface this week with some of his MPs calling for a more market-orientated approach to policies, especially in the public sector. All hell would have broken loose if such a divide surfaced at a pre-election Labour or Conservative conference.

The Liberal Democrats have just about got away with it because they are still treated more leniently than the other two parties in spite of their electoral success and high poll rating. That is partly because they are indeed in a different position to the other two. Mr Kennedy has wisely opted for self-deprecation rather than a wildly misplaced optimistic evangelism about the party's prospects. He does not claim that the Liberal Democrats will win the next election, but that they will make significant progress. In private, some of his colleagues are even less upbeat. Some predict that although the Liberal Democrats will win additional seats, the Conservatives will also make a few gains. There is an acceptance that Labour will be returned with a fairly large majority. Perhaps this explains why there has not been a great sense of feverish excitement at this conference, no feeling that power is moving fast towards this party. Instead there is a fair amount of analysis that does not get too carried away. I have heard senior figures reflect on an extraordinary political situation in which the government is unpopular, the Conservatives are making no headway and the third party is not ready for power.

I do not report these observations disparagingly. It is a sign that the Liberal Democrats are maturing. There have been conferences in the past when the third party was languishing in the polls and yet there would be endless heady predictions that they were heading for power. Now they are making genuine progress they dare to be realistic.

Even so, a dose of realism for the Liberal Democrats leads them down a fairly bleak path. If Labour wins another big majority the debates that really matter will be within the governing party. At a national level the Liberal Democrats face another four years on the sidelines, devising new policies and winning the occasional by-election. In the end Lord Ashdown sought another route to power in alliance with Mr Blair. Mr Kennedy is going it alone.

Mr Blair is vulnerable because of the dark chaos in Iraq, but at least he has been Prime Minister for many years and is well placed to win a third term. Mr Howard struggles to make headway, but has the compensation of being the only leader who has served as a cabinet minister in important government departments. Mr Kennedy must wait for a taste of power. The quality he needs more than any other is patience, superhuman patience. There are limits to the joys of being a secure leader of the third party in British politics.