Life in the orange-lit uplands

Election: the night. It was a happy night for the Lib Dems, but this may prove to be as good as it g

The Liberal Democrats have long memories. "We've been clawing our way uphill since 1988," said Lord Goodhart, a party grandee, above the cheers of activists. And well they might cheer, celebrating perhaps the best night for the party for half a century. The Lib Dem celebrations were certainly the liveliest of the evening: each win, and indeed each swing, was cheered to the rafters.

And the Lib Dem women sweeping into Westminster had the feel of a historic shift. The winner of Dumbarton East, Jo Swinson, beneficiary of a 7 per cent swing from Labour to take 42 per cent of the vote, prompted a series of sotto voce "who is she?" questions from watching activists: shades of Labour in 1997. And then, in short order, Birmingham Yardley, Manchester Withington, Rochdale, Hornsey and Wood Green - ejecting Barbara Roche - and Cardiff Central all dropped from the red to orange columns. The Liberal Democrats ended the night the second-biggest party in both Wales and Scotland, and the chief contender to Labour in many urban areas. "We are the second party across the country, and the only true national party," said an ebullient Sandy Walkington, the Lib Dem communications chief.

Heavyweight political pundits assembled at the ITN party (on an appropriately unstable boat on the Thames) were at various points flicking worriedly through their contact books. "Let's see," said one big hitter. "Liberal Democrats . . . no, no-body here. Oh shit!"

So were we witnessing a strange rebirth of Liberal England? Or the high water mark of Liberal seats? There were some truly remarkable results, as much in the seats where the party ran second as in those where they were scalped: the most chilling moment, from a Labour perspective, was the 11.5 per cent swing from Labour to the Lib Dems in Nottingham East - nowhere near enough to take the seat, but a dangerous harbinger.

Yet if the Lib Dems were strong on the left front, against Labour, their right-facing front - the one facing the Conservatives - was a thinner orange line. The Conservatives retook Weston-super-Mare, Guildford and Newbury, and held off the Lib Dem challenge across the south. Given that the Lib Dems benefited from a strong anti-Blair, anti-war boost, it seems unlikely that they can repeat their performance in four years' time. The Liberal Democrats have demonstrated that in urban areas they are the recipients of wayward Labour votes - but they have yet to prove that they can continue to be the recipients of Conservative votes in the shires and suburbs. Most Conservatives facing Liberal Democrats increased their majority. Only Taunton fell.

There is a danger in the Lib Dem successes, which is that Charles Kennedy has done enough to persuade himself and his party that he should get another go. In fact, the party desperately needs new leadership if it is to show itself to be a party not of protest but of government. And the strategic challenge for the party is even greater. Right now, it is picking up votes - and the odd ex-MP - on the left of Labour. But it will be harder to sustain this position once Gordon Brown ascends to the premiership.

The temptation for the party will be to believe that another heave or two will take it into a partnership government. The reality is that the future looks bleaker than election night's party mood suggested. A renewed Conservative Party poses the greatest threat to Labour in the most important seats. Under new leadership, and moving left socially and right economically (rather than the opposite, doomed strategy this time around), the Conservatives are the ones who can look with hopeful eyes at 2009.

It is possible that Brown will lead Labour to proportional representation and an accommodation with the Lib Dems. It would go against the fibre of his Labour soul, but Brown is nothing if not ruthless in the pursuit of power. A more intriguing possibility is a realignment not on the left, but on the liberal side of politics. A truly liberal Conservative Party could find much in common with the Orange Book liberals. It is not difficult to imagine the Tory David Willetts and the Lib Dem David Laws - a fiscal conservative and social liberal - in the same party.

The Liberal Democrats fought a good campaign on the ground, and clearly grabbed a clutch of tactical votes. But the orange-lit uplands may not survive the next electoral cycle. This might be as good as it gets for the Lib Dems.