Steve Richards: The Tories are running the show

All the key policy areas the coalition Government acts as a majority Conservative government would have done. And Nick Clegg's support is genuinely enthusiastic

The dynamics of the coalition still take the breath away even though, like most surprises in politics, its formation was entirely predictable. During the election every opinion poll pointed to a hung Parliament, with the Conservatives ahead of Labour in votes and probably in terms of seats. Nick Clegg declared that he would turn to the party that had come close to securing a mandate.

Nonetheless, Clegg could not have known precisely how events would unfold. Of all the politicians who have embarked on wildly oscillating journeys in recent months, Clegg can claim to have been on the wildest of them all. Gordon Brown has moved from No 10 to being more or less a full-time constituency MP in Scotland. Former Labour Cabinet ministers tour the country in their party's strange leadership contest. Conservatives seemingly doomed to powerlessness now run the country.

But no one comes close to Clegg in terms of changed circumstances. A few months ago he was virtually unknown. As a result of the televised debates he was the subject of Cleggmania. The subsequent election result was a letdown. Within days he was Deputy Prime Minister.

As the recess begins, he leads a party that slumps in the polls and is beginning to show signs of deep unease. On the BBC's Week in Westminster last Saturday, the former MP Sandra Gidley, who lost her seat to the Conservatives, told me that the Liberal Democrats would be "toast" unless they challenged and diluted the coalition's policies, arguing that nearly all of them originate from the Conservative wing. Such views are not uncommon and are starting to surface in public. As the coalition Cabinet met at Chequers last week the Lib Dem MP Tim Farron declared on the World at One that it was not his party's role to help re-brand the Conservative party.

Clegg is responding to the concerns by doing some branding of his own. He stated in a recent speech, and in private meetings with his MPs, that this will be the "liberal Parliament", one in which constitutional reforms, civil liberties, and devolution of power to the users of public services will be defining themes. In spite of his obvious rapport with David Cameron, I am told he is acutely aware of the unavoidable obstacle in the relationship – the Conservatives will seek to win the next election with an overall majority.

I get the impression that some of his allies are less intoxicated than Cameron's with the notion that the coalition will last beyond the next election as part of a permanent realignment of British politics. Some of them even view the Labour leadership contest with keen interest, wondering which of the candidates might be closest to elements of their liberal and pluralist agenda.

I sense they would prefer David Miliband if there is an election within the next year or so, and his brother if the Parliament lasts the full term, on the grounds that Ed is closer to them in relation to civil liberties and foreign affairs. This is the talk amongsome in Clegg's circle, exchanges based on an assumption that at some point their party might work with Labour rather than the Conservatives.

More widely, Clegg's allies make a valid point, that in a curious way the coalition is an assertion of their party's independence rather than representing a near fatal loss of distinct identity. For so long Labour and others had assumed that the Liberal Democrats would join a centre-left alliance. This did not happen. They will never be taken for granted in the same way again.

None of this is likely to reassure the doubters in Clegg's party. Although this particular coalition was always the more likely in the immediate aftermath of the election, it is still one that was not envisaged by most Liberal Democrats. Labour might have taken them for granted as automatic partners, but it did so with some good reason. Even as the election drew close, leading Liberal Democrats, including, I suspect, Clegg, worked on the assumption that a new partnership with Labour in opposition was the more likely realignment if any were to arise. It is still quite a shock for some in his party to see him hand in hand with the Conservatives at a national level.

The shock is deepened because his Conservative partners are more ideologically driven than fashionable orthodoxy allows. Cameron's charm, wit and ease with power disguise a Government that is introducing change at the speed of a high- speed train. His style and closeness to Clegg might give the impression of a Government that is firmly placed on the centre ground, but step back and review its plans to cut the state by a quarter, its proposed reforms to the NHS and its policies to create elite "free" schools. They make Margaret Thatcher seem like a slow-moving moderate.

At the weekend Cameron was helped, and not hindered, by the intervention of David Davis, his challenger for the leadership in 2005. Davis was overheard describing the partnership as the "Brokeback coalition". The protest helps Clegg as well in his claims of assertiveness on behalf of Liberal Democrats.

Davis makes a convenient misreading. Sandra Gidley is closer to the true position. In all the key policy areas the coalition Government acts as a majority Conservative government would have done. In the near future a revealing test will be the outcome of the review on the financing of universities. The Business Secretary, Vince Cable, floats the idea of a graduate tax to replace top-up fees. I bet the idea will stay floating.

In the ongoing dialogue with his party, Clegg has a decisive argument. The Liberal Democrats support the idea of working with other parties. Are they going to walk away from their first chance of such a partnership? In tempestuous times Clegg is also buttressed by the fact that he supports out of conviction, and not weak-kneed expediency, most policies of the coalition.

This, though, could also be a source of his undoing. Sections of his party do not share his genuine enthusiasm. The most important division in the coming months or years is not between Liberal Democrats and the Conservatives, nor between Cameron and the right of his party, but between Clegg's deeply-held convictions and those, also sincerely believed, held by a growing element in his own party.

s.richards@independent.co.uk